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LABOR AND CAPITAL 



LIST OF CONTRIBUTORS 



1. Rev. W. D. P. Bliss 

2. Hon. John C. Chase 

3. E. E. Clark 

4. Prof. John Bates Clark, LL.D. 

5. Ernest Howard Crosby 

6. Henry Davies, Ph.D. 

7. James B. Dill 

8. W. L. Douglas 

9. Otto M. Eidlitz 

10. Walter Fieldhouse 

11. Martin Fox 

12. Cardinal Gibbons 

13. Prof. Nicholas Paine Gilman, D.D. 

14. Charles Buxton Going 

15. Samuel Gompers 

16. Bolton Hall 

17. J. Kier Hardie, M.P. 

18. Thomas J. Hogan 
ig. George C. Holt 

20. H. W. Hoyt 

21. Hon. Samuel M. Jones 

22. Daniel J. Keefe 

23. John Brooks Leavitt 

24. Henry Demarest Lloyd 

25. Hugh H. Lusk 

26. John McMackin 

27. John Mitchell 

28. N. O. Nelson 

29. William Richmond Peters 

30. Eltweed Pomeroy 

31. Rt. Rev. Henry Codman Potter, D.D. 

32. Warren A. Reed 

33. Conrad Reno 

34. James Bronson Reynolds 

35. Jacob August Riis 

36. Frank P. Sargent 

37. John M. Stahl 

38. William T. Stead 

39. Anson Phelps Stokes 

40. Rev. Josiah Strong, D.D. 

41. William H. Tolman, Ph.D 

42. Hon. John De Witt Warner 

43. Everett P. Wheeler 

44. Hf.nry White 

45. Carroll D. Wright 






Labor and Capital 



A Discussion of the Relations of Employer 
and Employed 



Edited, with an Introduction 
by 

John P. Peters, D.D, 



G. P. Putnam's Sons 

New York and London 
Zbe "Knickerbocker, press 

1902 






' *•=>' 






THE LIBRARY «F 
<S»NGRESS, 

Two Copies Recedes 

MAY. 3 1902 

COPVRWHT ENTRY 

CLASS O^ XXo. No. 
COPY B. 



Copyright, 1902 

BY 

G. P. PUTNAM'S SONS 



Published, May, 190a 



ttbe finfcftevbocfcev Press, Hew yorft 



CONTENTS 

PAGE 

INTRODUCTION by rev. john p. peters, 

d.d. ix 

I. GENERAL QUESTION ^ i 

a. How shall labor and capital be recon- 
ciled? 

Henry Davies, Ph. D., Lecturer on the 
History of Philosophy in Yale University 3 

b. Are the interests of employer and em- 
ployed mutual, and, if so, how can this 
mutuality of interests be made effec- 
tive? 

Rev. Josiah Strong, D.D., President of 
the League for Social Service, author of 
" Our Country," " The New Era," etc. . 13 

II. COMBINATIONS OF EMPLOYERS 

AND EMPLOYED— ARE THEY 
MUTUALLY BENEFICIAL? . 23 

a. Are so-called trusts or giant incorpor- 
ations beneficial to employed as well as 
to employer? How? 

b. Are Labor Unions beneficial to em- 
ployer as well as to employed ? (Sug- 
gestions how they might be made 
beneficial or more beneficial.) 



vi Contents 

PAGE 

I. TRUSTS: 

(i) John Bates Clark, Ph. D., LL.D., 
Professor of Political Economy 
in Columbia University, author 
of " The Distribution of Wealth," 
" Capital and Its Earnings," 
" Philosophy of Wealth," etc. . 27 

(2) James B. Dill, Lawyer . . 32 

(3) Anson Phelps Stokes . . 44 

(4) William Richmond Peters, Mer- 
chant 50 

Consult also articles of Gompers, 
White, Holt, Warner, Wright, Field- 
house, Gilman, Pomeroy, Hardie, 
Chase, Bliss, and Crosby. 

II. LABOR UNIONS: 

(1) James Bronson Reynolds, Head- 
worker in University Settlement, 
Secretary to Mayor of New York 55 

(2) Samuel Gompers, President of 
American Federation of Labor . 62 

(3) Daniel J. Keefe, President of the 
International Longshoremen's 
Association .... 75 

(4) Henry White, General Secretary 
of the United Garment Workers 

of America ..... 80 
Consult also articles by J. B. Clark, 
Stokes, Holt, Leavitt, Warner, Field- 
house, Stahl, Eidlitz, Hoyt, Douglas, 
Fox, Gihnan, Bliss, Crosby, and in 
appendix, Mitcliell. 



Contents vii 

PAGE 

III. TRUSTS AND LABOR UNIONS 

FROM A LEGAL ASPECT . . 91 

a. Control of trusts. 

b. Is it necessary or desirable that labor 
unions be incorporated to make them 
legally and financially responsible for 
contracts and agreements? 

c. Could labor unions if incorporated rely 
upon fair treatment from the courts? 
(How about methods of legal procedure ; 
"government by injunction"; legal de- 
lays which put the capitalist at such an 
advantage as to amount to the denial of 
justice to the laborer, etc.)? 

d. What rights, if any, moral or legal, has 
the workman in the plant of the work 
(comparable, for instance, to tenants' 
rights in land under British legislation 
in Ireland) ? 

(1) George C. Holt, Lawyer . . 95 

(2) John Brooks Leavitt, Lawyer . 1 10 

(3) Hon. John De Witt Warner, 
Lawyer and former Member of 
Congress 119 

Consult also : 

(a) Articles of Dill and Stokes. 

(b) Articles of Keefe, Lloyd, Mit- 
chell, Eidlitz, Douglas, Gilman y 
and in appendix, Mitchell. 

(c) Article of Lusk. 

id) Article of Mitchell in appendix. 



viii Contents 

PAGE 

IV. CONCILIATION AND ARBITRA- 
TION 127 

a. General plea for arbitration. 

b. Is compulsory arbitration, enforced by 
law, desirable, and if so, under what 
conditions? 

c. How can voluntary arbitration in case 
of labor disputes be made effective? 

I. GENERAL PLEA FOR CONCILIATION 

AND ARBITRATION: 

(1) Rt. Rev. Henry Cod man Potter, 
D.D., D.C.L., LL.D., Bishop of 
New York, author of " The 
Scholar and the State," ''Rela- 
tions of Science to Modern Life " 1 33 

(2) His Eminence, James, Cardinal 
Gibbons, Archbishop of Balti- 
more, author of " Our Christian 
Heritage," etc 140 

II. VIEWS OF SPECIALISTS: 

(1) Warren A. Reed, Chairman of 
Massachusetts Board of Concilia- 
tion ...... 143 

(2) Carroll D. Wright, United States 
Commissioner of Labor Statistics 153 

(3) John McMackin, New York State 
Labor Commissioner . . . 161 

(4) Charles Buxton Going, editor of 
"The Engineering Magazine" . 168 



Contents ix 

PAGE 

III. COMPULSORY ARBITRATION (FAVOR- 
ABLE VIEW): 

(i) Walter Fieldhouse, Secretary and 
Treasurer of the Association of 
Western Manufacturers . 179 

(2) Henry Demarest Lloyd, author 
of " Wealth against Common- 
wealth," "Newest England," "A 
Country without Strikes," etc. . 185 

(3) Conrad Reno, LL.B., author of 
" The Law of Non-Residents," 
"State Regulationof Wages," etc. 200 

(4) Hugh H. Lusk, former member 

of New Zealand Parliament . 221 

Consult also article by Holt. 

IV. COMPULSORY ARBITRATION (UNFAV- 
ORABLE VIEW): 

(1) E. E. Clark, Grand Chief Con- 
ductor, Order of Railway Con- 
ductors 238 

(2) John Mitchell, President of the 
United Mine Workers of America 245 

(3) John M. Stahl, editor of " Farm- 
er's Call," and Secretary of Farm- 
ers' National Congress . . 252 

Consult also articles by Gompers, 
Wright, Douglas, Hogan, Fox, and 
in appendix, Adams and Gompers. 

V. VOLUNTARY ARBITRATION AND CON- 
CILIATION (VIEWS OF EMPLOYERS): 

(1) Otto M. Eidlitz, President of 

Mason Builders' Association . 259 



x Contents 

PAGE 

(2) H. W. Hoyt, President of Na- 
tional Founders' Association . 268 

(3) W. L. Douglas, Manufacturer, 
Brockton, Mass 275 

(4) Thomas J. Hogan, General Secre- 
tary of the National Association 

of Stove Manufacturers . . 280 
VI. VOLUNTARY ARBITRATION (VIEWS OF 
EMPLOYED) : 

(1) Martin Fox, President of Iron 
Moulders' Association of America 287 

(2) Frank P. Sargent, Grand Master 
of Brotherhood of Locomotive 
Engineers 299 

Consult also articles by Gompers, E. 
E. Clark, and Mitchell. 

V. MODEL INDUSTRIES .... 305 

a. Profit and Stock-sharing. 

b. Co-operation. 

I. FAVORABLE VIEWS: 

(1) William H. Tolman, Ph.D., Di- 
rector of the Industrial Depart- 
ment of the League for Social 
Service, author of " Industrial 
Betterment " . . . . 309 

(2) William T. Stead, editor of the 

" Review of Reviews " . . 323 

(3) Nicholas Paine Gilman, D.D., 
Professor of Sociology in the 
Meadville Theological Seminary, 
author of " Socialism and the 



Contents xi 

PAGE 

American Spirit," " Profit Shar- 
ing," " Dividend to Labor," etc. . 330 

(4) N. O. Nelson, Manufacturer, of 

St. Louis, Mo., and Leclaire, 111. 344 
II. UNFAVORABLE VIEWS : 

Eltweed Pomeroy, Manufacturer, 
Newark, N. J., author of numer- 
ous articles on the " Initiative and 
Referendum," editor of " Direct 
Legislation," etc. . . . 353 

Consult also under both I. and IT. 

articles by Hardie, Jones, Chase, and 

Bliss. 
VI. SOCIALISM AND SINGLE TAX . 359 

(1) J. Kier Hardie, M.P. . . .363 

(2) Hon. Samuel M. Jones, Mayor of 
Toledo, 369 

(3) Hon. John C. Chase, former 
Mayor of Haverhill, Mass. . . 374 

(4) Rev. W. D. P. Bliss, President of 
Social Reform League of Amer- 
ica, Secretary of Civic Council of 
New York, editor of " Cyclopedia 
of Social Reform," former editor 
of " The Dawn " and " The Am- 
erican Nation" .... 378 

(5) Bolton Hall .... 388 

(6) Ernest Howard Crosby, President 
of Civic Council of New York, 
author of " Plain Truths in Psalm 

and Parable," etc. . . . 400 
Consult also article of Warner. 



Xll 



Contents 



VII. THE UNEMPLOYED . 

a. Is permanent work with comfortable liv- 
ing wage possible for all in this country ? 

b. How may work and workers be brought 
together? 

(i) Everett P. Wheeler, Lawyer, 
President of the East Side Settle- 
ment House 

(2) Jacob August Riis, author of 
" How the Other Half Lives,' 
" Making of an American," etc 

APPENDIX 

a. Letter of Charles Francis Adams on 
Arbitration ..... 

b. Article of John Mitchell on Recognition 
of Trade-Unions .... 

c. Extracts from address of Samuel Gom 
pers on Arbitration 

INDEX 



PAGE 
41*5 



419 

425 

433 

433 
440 

448 
459 



INTRODUCTION 

THE extraordinary development of manufactur- 
ing industries in recent years and the increas- 
ing tendency toward the consolidation of those 
industries in vast combinations and corporations, 
together with the almost commensurate growth of 
labor organizations, has rendered labor disturbances 
a national danger. In the industrial sphere we have 
reached, or are fast reaching, a period of concentra- 
tion and high organization similar to that attained 
in the political world. Wars were once almost the 
avocation of nations. Europe was never free from 
wars, conducted often on frivolous pretexts between 
some of its numerous kingdoms and principalities, 
but sometimes embroiling large areas. This was the 
normal condition of society. Gradually, with the de- 
velopment of industries and the increase of wealth, 
new conditions arose. Great nations took the place 
of small. War assumed constantly more formidable 
proportions and entailed ever greater sacrifices. 
The science of arms developed. More deadly 
weapons were invented. Armaments were in- 
creased. Finally the military organization of whole 
nations took the place of temporary levies. And 
this very perfection ofmilitary and national organi- 
zation began to put a stop to war. It had become 



xiv Introduction 

too costly, too destructive. Not that hostility be- 
tween nation and nation has come to an end. They 
stand one over against the other, armed to the teeth, 
and the world trembles with apprehension of the 
outbreak of a war more terrible than any known 
heretofore. But just because war has become so 
terrible each hesitates to break the peace for fear of 
the disastrous consequences to itself which may 
ensue; and the disinterested nations, when war is 
threatened, hasten to put pressure upon the parties 
to the dispute to bring about a reconciliation, for, 
after all, they are themselves far from disinterested, 
since in the event of war they too will suffer by the 
loss of markets in which to buy or sell, and it may 
well be that they also will become embroiled. 

A somewhat similar condition we have almost 
reached in the industrial world. Employers* and 
employed stand over against one another in great 
organizations, a conflict between which may mean 
national disaster, as we have learned from the ex- 
perience of England in the strike of the engineering 
trades in 1897, which cost her her industrial su- 
premacy. Thorough organization of both sides in 
great masses renders war between employers and 
employed less common, but if it does come it is 
vastly more disastrous. And there are two sides, 
well trained, well organized, which can be mobilized 
almost at a moment's notice. Who can tell what 
spark may inflame passion and kindle a conflict 
more costly than any hitherto known? The attitude 
of employers and employed toward one another has 
become a matter of supreme national importance. 



Introduction xv 

How can we render conflict impossible? How can 
we bring employers and employed together in rela- 
tions of permanent and stable peace and co- 
operation? 

Genesis of the Book. — It was the threat of a 
great national disaster which might develop out of 
the conflict between the United States Steel Cor- 
poration and the Amalgamated Association of Iron, 
Steel, and Tin Workers in the summer of 1901 which 
was the initial cause of this book. In the heat of 
that conflict, as the result of some preliminary cor- 
respondence the Bishop of New York addressed the 
following letter to Mr. Hearst.: 

Hawk Island, Lake Placid, N. Y., Aug. 20, 1901. 
W. R. Hearst, Editor the N. Y. American and Journal : 

My Dear Sir: — It would take a volume to answer the 
long list of questions which the present labor situation 
has brought forth, and when they were answered what 
would they be but truisms in the labor controversy, e. g., 
" That employers should make concessions, that violence 
should be avoided, that arbitration should be employed, ' ' 
etc.? 

I confess the gravest question seems to me to be, "How 
can working men and employers be helped to a better under- 
standing of their mutual interests, and, indeed, even before 
that, of the fact that their interests are mutual ? ' ' 

There is something infinitely pathetic in the effort of 
Mr. Shaffer and his confreres to " play politics " in out- 
witting the corporations. 

It is all so futile and mischievous, and instead of en- 
couraging it and lending itself as it is constantly doing 
to inflame class hatreds, would it not be worth while for 



xvi Introduction 

the press to try and educate the ignorant to some intelli- 
gent understanding of social problems ? 

A symposiujn of clever men discussing the question of 
wages, common ownership of plants, land — anything to make 
the people "thiiik" is what is wanted. 

If you would print chapter by chapter such a book as 
Mallock's Labor and the Popular Welfare 1 and then get 
such men as Mr. Crosby or Mr. Gompers or some others 
to undertake to discuss it, then a newspaper would be 
doing real good. 

The communication from Mr. Charles Francis Adams 2 
to which you call my attention is admirable — so far as it 
goes — and his suggestion that there should be somewhere 
a commission or court of appeal in the realm of our 
social economy where differences between employers and 
working men should go, and that by common consent, 
born of a sound public opinion — which, if I understand 
it, is in substance the burden of Mr. Adams' communi- 
cation — is altogether excellent. 

Unfortunately the difficulty lies further back. You 
must, first of all, provide somehow "a sound public 
opinion." 

If, on one hand, we have large indifference, com- 
mercial greed, impatience of any other considerations 
than those involved in the doctrine of demand and sup- 
ply, and if, on the other, you have the resentment pro- 
voked by real or fancied wrongs, imperfect apprehension 
of fundamental economic truths, exaggerated estimates 
of the value of particular specifics for the cure of exist- 
ing conditions, or blind and unreasoning devotion to a 
particular leader, you have hardly the elements for 

1 " Or better yet, Mr. Henry Wood's Political Economy and 
Humanism." — Extract from later letter. 

2 Printed in the appendix. 



Introduction xvii 

making " sound public opinion." And yet, if you are to 
avail yourself of them, you have them at hand. 

The press, which you must pardon me for saying in 
all frankness, has not always, in seeking to befriend 
labor, really been eager to serve its best interests, must 
here make the inexorably necessary beginning by refrain- 
ing from exaggeration and discouraging heated speech. 
To inflame passion, to pervert facts, to withhold quali- 
fying considerations which sometimes alter the whole 
aspect of a particular question, these are methods for 
the poorer and least creditable type of a jury lawyer per- 
haps, but they are not those of a great public teacher 
and enlightener, such as a newspaper of the first class 
should be. 

I do not need to be told at this point that the sensa- 
tional policy is usually most effective for selling a news- 
paper, but I think it would be worth while for the press, 
even from a purely commercial point of view, to consider 
whether a policy which inflames the popular judgment, 
but does not enlighten it, may not involve in its conse- 
quences destructive forces which do not discriminate as 
to where they strike, and which, in pulling down, like 
Samson, the structure of which they are a part, perish 
with their enemies in its ruins. Surely there is some 
better way than that, and surely it is worth while for the 
press to try and find it out. 

If you can secure, therefore, as already mentioned, 
the aid of competent minds representing the different 
points of view on the labor question in its largest aspect, 
and if they are willing to discuss it without prejudice and 
without invective, two results at least may be obtained — 
a large group of facts, now little recognized, will be 
brought into view, and all reasonable men, of whatever 
calling or theory, will be constrained to own, first, that 



xviii Introduction 

there is no single short-cut, patent-applied-for remedy 
for a situation so complex; and second, that along lines 
of mutual consideration and concession that solution is 
not to be dismissed as impossible. 

To lead men to " think " and " know," not to shout 
or to shriek or to strike, that is the best service you can 
render. For then, when the time comes that they must 
both shout and strike, they may hope to do so to some 
purpose. 

Sincerely yours, 

Henry C. Potter. 

Mr. Hearst decided to adopt very literally Bishop 
Potter's suggestion, and to make the experiment of a 
symposium in the great daily paperscontrolled by him, 
The American and Journal, of N. Y. , Hearst's Chicago 
American, and The Examiner, of San Francisco, on 
the subject How can Labor and Capital be Reconciled ? 
At Bishop Potter's suggestion I was asked to or- 
ganize and conduct this symposium. It began with 
the publication of Bishop Potter's letter, August 
25, 1901, and continued, with some interruptions, 
occasioned by the assassination and death of our 
President, until November 3d, covering more than 
fifty large newspaper pages. College professors, 
national and State officials, ecclesiastics, lawyers, 
philanthropists and reformers, men of affairs and 
labor leaders, responded readily to my requests for 
contributions, and so ably that from all sides came 
a demand for these papers in a more permanent 
form than the columns of a daily paper. Hence 
this volume. 

Questions Asked and Answered.— As Bishop 



Introduction xix 

Potter had said in his letter: "I confess the gravest 
question seems to me to be, ' How can working men 
and employers be helped to a better understanding 
of their mutual interests, and, indeed, even before 
that, of the fact that their interests are mutual? ' 
I addressed to each contributor, first of all, the 
general question: "Are the interests of employer 
and employed mutual, and, if so, how can this 
mutuality of interest be made effective? " In ac- 
cordance, also, with Bishop Potter's suggestion, 
Mallock's Labor and the Popular Welfare was printed 
in the symposium chapter by chapter (in substance), 
with a view to eliciting discussion. It certainly 
accomplished its purpose so far as drawing corre- 
spondence from all parts of the country was con- 
cerned ; but does not appear to have affected in any 
way the regular disputants. Further, one or more 
special questions were addressed to each contributor. 
Consequently the articles in this book have, as a 
rule, two parts, one which deals with the general 
questions of the reconciliation of labor and capital, 
as in the title of the symposium, and the mutual 
interests of employer and employed ; and one which 
deals with certain specific questions. Those ques- 
tions, as originally propounded, were as follows: 

1. Are so-called trusts or giant incorporations 
beneficial to employed as well as to employers? 
How? 

2. Are labor unions beneficial to employers as 
well as to employed? (Suggestions how they might 
be made beneficial or more beneficial.) 

3. Is it necessary or desirable that labor unions 



xx Introduction 

be incorporated to make them legally and financially 
responsible for contracts and agreements? 

4. Could labor unions, if incorporated, rely upon 
fair treatment from the courts? (How about 
methods of legal procedure; " government by in- 
junction," legal delays which put the capitalist at 
such an advantage as to amount to denial of justice 
to the laborer, etc. ?) 

5. Is compulsory arbitration, enforced by law, 
desirable, and, if so, under what conditions? 

6. How can voluntary arbitration in case of labor 
disputes be made effective? 

7. Does the laborer receive his fair share of the 
joint product of labor and capital (in view, for ex- 
ample, of the immense increase of earning power 
through use of machinery)? How are the relative 
shares of capital and labor to be apportioned? 

8. To what extent can, in your judgment, the 
apparently conflicting interests of capital and labor 
be unified through profit sharing? 

9. Results of experience in so-called model in- 
dustries. 

id. Socialist standpoint. Single tax. 

11. Is our present tariff (in general) beneficial to 
(a) the manufacturer, public carrier, and in general 
the employer (does it foster trusts? — is this good or 
bad?); (b) the workman, the employed (does it in- 
crease his effective wage?)? 

12. Is permanent work with comfortable living 
wage possible for all in this country? How may 
work and workers be brought together? 

13. What rights, if any, moral or legal, has the 



Introduction xxi 

workman in the plant of the work (comparable, for 
instance, to tenants' rights in land under British 
legislation in Ireland)? 

Of these questions, number 1 1, dealing with the 
tariff, was afterwards withdrawn, because, although 
it seemed to me eminently pertinent to the general 
topic, nevertheless there was danger that its dis- 
cussion would savor too strongly of politics more 
narrowly so-called. It had, however, already been 
answered briefly by Messrs. Warner and Crosby, 
and is traversed also in the articles of Messrs. 
Peters, Fieldhouse, and Hall; but as it is only 
briefly alluded to by these writers, and not dis- 
cussed at any length, no division has been allotted 
to it in this book. Similarly, question 7, as to the 
relative shares of capital and labor, has been 
dropped, because, although of great importance, 
no one seemed ready to attempt anything like a 
definite answer or even discussion of it in that form. 
It is referred to in the papers of Messrs. Stokes, 
White, Warner, and Crosby, and is treated indi- 
rectly by many others. Indeed it may be said that 
the belief that the laborer does not receive his fair 
share in the division of profits, as it lies at the base 
of trade unionism, affects all the papers of the 
labor men, and not a few also of those who are not 
labor men, in this volume. It seemed to be the 
general opinion that the condition of the laborer 
was improving, although probably not in proportion 
to the increase in wealth. Some stated definitely 
that the laborer does not receive his proportionate 
share of the joint production of labor and capital. 



xxii Introduction 

The second part of the question may be said to be 
answered from various points of view in the papers 
on trades unions, arbitration, profit and stock 
sharing, co-operation, model industries, socialism, 
and single tax. The question as a whole, there- 
fore, has no special division allotted to it in the 
arrangement of the book. 

Question 13, as to the legal or moral rights of the 
workman in the plant of the work, may occasion 
some surprise. A belief in such moral right, at 
least, underlies the positions of the socialist and, 
to some extent, the single-taxer, and has led to 
various practical experiments in profit and stock 
sharing, co-operation, and the like. A similar idea 
influences more or less consciously the general atti- 
tude of not a few reformers and of a large part of 
the laboring men. An article by one of the latter 
class, John Mitchell, President of the United Mine 
Workers of America, in The Independent of August 
15, 1901 (printed for reference in the appendix), 
came so near to formulating this position of the 
moral right of the workman in the plant, from the 
laborer's point of view, that I was led to propound 
the question directly for discussion. In the ar- 
rangement of the book I have included it under the 
division treating of the legal aspect of trusts and 
labor unions. 

Composition and Arrangement.— Of the 
papers used in the original symposium two, con- 
tributed by Cardinal Gibbons and President Hadley, 
are not reproduced here. While authorized for use 
in the symposium by the writers, and pertinent to 



Introduction xxiii 

the discussion, both had already appeared in book 
form. A contribution by myself, in the nature of a 
sermon, has also been omitted. The other articles 
contained in the symposium, with the exception of 
four, the authors of which were practically inaccess- 
ible, were afterwards returned to the writers for re- 
vision and correction with a view to permanent 
publication. In a few cases the original articles 
have been entirely rewritten. In most cases the 
changes from the original form are relatively slight. 
Only one of the articles in this book, that of Mr. 
Dill, was not published in the original symposium, 
having arrived too late for use. This article, con- 
stituting the body of an address delivered before 
the Merchants' Club in Chicago, has been revised 
by the author for the present publication. The 
brief article by Cardinal Gibbons on arbitration ap- 
peared originally in The Independent. Mr. Peters' 
article on "The Benefits of Trusts" was first pub- 
lished as a letter in the New York Times, but has 
been enlarged and somewhat changed by the writer. 
The articles on arbitration by Messrs. Fieldhouse, 
Lusk, E. E. Clark, Mitchell, Stahl, Douglas, Hogan, 
Fox, Keefe, Reed, Going, Hoyt, and Sargent were 
prepared originally for the Arbitration Conference 
of the National Civic Federation, held in Chicago 
in December, 1900. These papers were about to 
be published in the shape of a report of the Con- 
ference at the time when the symposium was 
organized. As they covered two of my questions, 
I solicited their use for the purpose of the sym- 
posium, from Mr. Ralph M. Easley, Secretary of 



xxiv Introduction 

the National Civic Federation. With the consent 
of their authors my request was granted, with the 
view of giving that discussion on arbitration the 
widest possible circulation. Afterwards the papers 
were again revised by the authors (with the excep- 
tion of one paper, the author of which could not be 
reached) for publication in this volume. The divi- 
sion on arbitration may, therefore, be regarded as 
in a sense a substitute for the omitted report of the 
Conference on Arbitration of the National Civic 
Federation. I desire to make this special announce- 
ment of the provenance of these articles as some 
small recognition of the peculiar courtesy shown me 
both by their authors and also by the Secretary of 
the Federation. 

In arranging this material for permanent publica- 
tion I have retained the questions originally asked, 
as necessary to a proper understanding of the point 
of view of the writer, but re-arranged them under 
general groups. Not a few of the articles deal with 
two or more of these questions. As it is of course 
impracticable to reprint them under each several 
division, or to divide them into sections according 
to the topics treated, they have been printed under 
that division to which they seem primarily to be- 
long and referred to under the other divisions the 
themes of which they discuss. For convenience 
of reference mention is made at the close of each 
division in the table of contents of other articles 
dealing with the same topic; and still further to 
facilitate reference, a brief synopsis of the contents 
of all articles except those in the general division 



Introduction xxv 

has been prefixed to their respective divisions of 
the book. 

Summing Up. — It is not to be expected, of 
course, that any such discussion will settle every- 
thing, or that conclusive answers can be given to 
most of the questions asked, but the general agree- 
ment, amounting to unanimity on certain points, 
and the trend of opinion on others are so interest- 
ing, and, as it seems to me, so important, that I 
shall venture to endeavor briefly to sum up some 
points of the discussion. In the first place it should 
be noted that the contributors to this volume rep- 
resent not only economists and reformers, but to an 
even larger extent employers and employed, and 
the utterances especially of the latter may be re- 
garded as an authoritative expression of the opinions 
of the working men comprised in what is commonly 
known as " organized labor," i. e., the mass of the 
more intelligent working men of the country. There 
is not quite the same sort of organization, nor the 
same consensus of opinion among the employers; 
but the views here presented are probably a fair ex- 
pression of the opinion of the more thoughtful and 
broad-minded employers of labor. 

Trusts. — Even two short years ago there was an 
almost universal popular outcry against so-called 
trusts, which made itself felt in a great deal of at- 
tempted and some actual hostile legislation. Part 
of this outcry came or was believed to come from 
laboring men. There is very little of that feeling 
shown in the articles in this book, and what little 
there is comes exclusively or almost exclusively 



xxvi Introduction 

from the socializing or socialistic writers, although 
by no means from all of these, since some of them 
welcome trusts as a stepping-stone to State control. 
There is still, however, the fear of monopoly 
through trusts, and this seems to some of the best 
thinkers a grave danger. Other more immediate 
dangers are the interference of trusts in politics and 
fraudulent or fictitious capitalization, issue of stock, 
and so forth, which render urgent a supervision and 
control of trusts similar to that employed in regard 
to banks and insurance companies, and in some 
States railroads. The giant incorporation may be 
and is beneficial to the community at large in re- 
ducing prices, and to its own laborers in raising 
wages, provided it does not succeed in destroying 
competition, is honestly and efficiently managed, 
and is the creature, not the master of government. 
Labor Unions. — On the benefits of labor 
unions to their own members both in raising 
wages and also as an educative force there has 
never been any serious difference of opinion ; but it 
has often been contended that labor unions are 
the natural enemies of employers, and even that 
they are a source of injury to the community at 
large. Nothing has been published which shows 
more conclusively the change of opinion which has 
taken place in this regard than the articles in this 
volume. There is absolute unanimity with regard to 
the value of labor unions to the employers and the 
community at large, as well as to their own mem- 
bers. Employers assert, in the most emphatic way, 
the importance to the employer of strong labor 



Introduction xxvii 

unions with which to deal, and economists feel that 
a blow to trade unionism would be a blow to busi- 
ness. But it is pointed out that there are faults and 
dangers in trade unionism, the danger of attempted 
monopoly on one side, and of disregard of law and 
disregard of agreements and financial irresponsibility 
on the other. Disregard of law has resulted in vio- 
lence in connection with strikes, which has in its 
turn led to that use by the courts of injunctions 
which has given rise to the phrase "government by 
injunction." This system of legal procedure is un- 
equivocally condemned by lawyers and economists, 
as well as by labor men, as unnecessary, demoraliz- 
ing, and inherently illegal. It is shown that the 
ordinary processes of law, adequately and honestly 
administered, are sufficient to meet the needs of the 
situation both as regards strike violence and also, 
probably, as regards responsibility for fulfilment of 
agreements, without resort to such arbitrary methods. 
Such methods aggravate that distrust of the courts, 
the existence of which among laboring men Is made 
clear in these articles. This distrust of the courts 
makes itself felt, among other things, in the objec- 
tions of labor unions to incorporation, and in their 
opposition to anything approaching compulsory 
arbitration, that is agreement to submit disputes to 
arbitrators whose decisions can be enforced. 

Arbitration.— It is the matter of arbitration to 
which the greatest amount of space has been allotted, 
because of its peculiarly practical character, as an 
immediate means o[ settling labor disputes, and 
bringing employed and employers together. The 



xxviii Introduction 

arguments here presented for compulsory arbitra- 
tion, that is, for some legal mode of making and 
enforcing a settlement between employers and em- 
ployed in case of labor troubles, are very strong, 
and do not seem to us to be fully met by the other 
side. It is, however, clear from this discussion 
that whatever the future may have in store, the 
times are not now ripe for the adoption of such 
methods in any form (except possibly in Massa- 
chusetts, which seems to be generally more advanced 
in its treatment of industrial problems than the rest 
of the country). One cause of this distrust of gov- 
ernmental arbitration is the belief that the State or 
national courts of arbitration would be in politics. 
This belief is in general the result of experience 
with our present State boards of mediation, concili- 
ation, and arbitration. Let the angel Gabriel be 
appointed chairman or member of a State board of 
conciliation or arbitration because he is a Republi- 
can or a Democrat and the usefulness of that board 
is minimized if not utterly destroyed. Added to 
this distrust of official boards resulting from the be- 
lief in their political character, is the further un- 
fortunate belief among working men, resulting in 
part from the practice of the so-called "government 
by injunction," that all official courts and boards 
are liable to be controlled or manipulated in the 
interests of "capital" against "labor." But it 
should be noted that in point of fact employers 
seem to be almost as much opposed to enforced 
arbitration and official boards as are their employees. 
Both sides, however, clearly recognize the need 



Introduction xxix 

of some method of adjusting their differences other 
than strikes and lockouts. The generally approved 
plan is trade conferences and agreements, and trade 
boards of conciliation and arbitration. Here some 
would stop, believing that matters which could not 
be settled by these means could not and should not 
be settled by reference to outsiders as arbitrators or 
umpires. The general opinion of both sides seems 
to be in favor, however, of going a step further, and 
referring matters which cannot be settled by trade 
conferences or trade boards of conciliation and arbi- 
tration to outside umpires or arbitrators. Some- 
times the State boards are utilized for this purpose, 
but unfortunately, as already noted, they do not in 
general seem to command the necessary respect and 
confidence of both employers and employed. 

Church Arbitrators. — This has led to various 
endeavors to meet the needs of the situation by 
creating a permanent board of voluntary mediators 
and arbitrators, who shall keep in touch with in- 
dustrial conditions and offer and afford to both 
sides an impartial tribunal, with public opinion be- 
hind it, through which to settle their differences. 

A few years since the "Church Association for 
the Advancement of the Interests of Labor " organ- 
ized such a board or committee in New York 
City, unsectarian in its character, and representing 
in its membership employers, employed, and the 
general benevolently and intelligently interested 
community. This committee, which included in 
its membership Bishop Potter and Mayor Low, won 
considerable confidence, more especially among the 



xxx Introduction 

working men, who seem on the whole to have been 
more ready to seek arbitration, and adjusted a num- 
ber of industrial differences, including several strikes. 
As an outcome of the activity of this Association, 
commonly called CAIL, the General Convention of 
the Protestant Episcopal Church, held at San Fran- 
cisco in October and November, 1901, was led to 
consider the duty of the Church to labor for in- 
dustrial peace, and adopted the following resolu- 
tions, which are peculiarly significant because they 
seem to indicate the beginning of an awakening of 
the consciences of religious men to their obligation 
to utilize their religious mechanisms in some way in 
the practical work of reconciling industrial differ- 
ences and hostilities: 

Whereas, the Church of Jesus Christ has been com- 
missioned by her Lord to be the friend and counsellor 
of all sorts and conditions of men, rich and poor alike, 
without respect of persons ; 

And whereas, it is a part of her divine mission to be a 
mediator and peacemaker between those who are at strife 
one with another; 

And whereas, the relations of Labor and Capital, 
which ought to be harmonious, are from time to time 
very seriously disturbed, to the prejudice of peace and 
good will among the people of the land, and often to the 
suffering of thousands of women and children, as 
well as to the sowing of bitterness and strife between 
brethren ; 

And whereas, the Christian Church would be untrue 
to her Master — the Carpenter of Nazareth — if she were 
not the friend of the laboring man, and did not hold his 



Introduction xxxi 

welfare as dear to her heart as that of his employer; 
therefore, 

Resolved, the House of Bishops concurring, that a 
Joint Commission of both Houses, to consist of three 
bishops, three presbyters, and three laymen, be appointed 
(the bishops in such manner as the House of Bishops 
shall determine, and the other members by the President 
of this House) as a standing commission upon the rela- 
tions of Capital and Labor, and employers and work 
people, whose duty it shall be: first, to study carefully 
the aims and purposes of the labor organizations of our 
country; second, in particular to investigate the causes 
of industrial disturbances as these may arise; and third, 
to hold themselves in readiness to act as arbitrators 
should their services be desired, between the men and 
their employers, with a view to bring about mutual con- 
ciliation and harmony in the spirit of the Prince of 
Peace; 

Resolved, That the said Commission shall make report 
of its proceedings to the General Convention; 

Resolved, That it is desirable that the above-named 
Commission should be continued by re-appointment 
every three years. 

The following were appointed members of this 
Commission : Bishop Potter of New York, Bishop 
Lawrence of Massachusetts, Bishop Anderson of 
Chicago, Rev. Dr. McKim of Washington, Rev. 
Dean Hodges of Massachusetts, Rev. Dean Wil- 
liams of Ohio, Hon. Seth Low and Jacob Riis of 
New York, and Mr. Samuel Mather of Ohio. At 
the first meeting of this Commission, held in New 
York, Jan. 14, 1902, Dean Hodges, of Cambridge, 
Mass., was made Secretary. 



xxxii Introduction 

National Civic Federation.— Moving on the 
same lines, as an outcome of the Conference on Arbi- 
tration held in Chicago in December, 1900, the 
National Civic Federation organized an Industrial 
Department with a view to the ultimate creation of 
a voluntary national grand jury to mediate and arbi- 
trate in labor troubles. The great steel strike of 
1901 found this work incomplete and the grand 
jury not yet chosen. In spite of this fact, however, 
through its secretary and various members of its In- 
dustrial Department, the National Civic Federation 
accomplished an important and valuable work of 
conciliation, which averted most of the dangerous 
results which had been apprehended from that 
strike. In December, 1901, a conference was held 
in New York (the proceedings of which will shortly 
be published by Messrs. G. P. Putnam's Sons) on 
the call of the National Civic Federation, at which 
the organization of this grand jury of labor and 
capital was completed as follows : 

Marcus A. Hanna, Chairman. 

Samuel Gompers, 1st Vice-Chairman. 

Oscar S. Straus, 2d Vice-Chairman. 

Charles A. Moore, Treasurer. 

Ralph M. Easley, Secretary. 

EXECUTIVE COMMITTEE 

On the part of the public : Grover Cleveland (Ex- 
President of the United States), Princeton, N. J. ; 
Cornelius N. Bliss (Ex-Secretary of the Interior), 
New York City; Oscar S. Straus (Ex-Minister to 
Turkey), New York City; Charles Francis Adams 



Introduction xxxiii 

(former President of Union Pacific Railroad), Bos- 
ton ; Archbishop John Ireland (of the Roman Catho- 
lic Church), St. Paul; Bishop Henry C. Potter (of 
the Protestant Episcopal Church), New York City; 
Charles W. Eliot (President Harvard University), 
Cambridge, Mass.-; Franklin MacVeagh (Merchant), 
Chicago; James H. Eckels (former Comptroller of 
Currency of the United States), Chicago; John J. 
McCook (Lawyer), New York City ; John G. Milburn 
(Lawyer), Buffalo; Charles J. Bonaparte (Lawyer), 
Baltimore; Ralph M. Easley, Ex-officio (Secretary 
of the National Civic Federation), New York City. 
On the part of employers : Marcus A. Hanna (Coal 
Mines, Iron, Shipping and Street Railways), Cleve- 
land ; Charles M. Schwab (President The U. S. 
Steel Corporation), New York City; S. R. Callaway 
(President The American Locomotive Works), 
New York City; Charles A. Moore (President The 
Shaw Electric Crane Company), New York City; 
John D. Rockefeller, Jr., New York City; Edward 
P. Ripley (President Atchison, Topeka & Santa 
Fe Railway System), Chicago; J. Kruttschnitt 
(Vice-President Southern Pacific Railroad Com- 
pany), San Francisco; H. H. Vreeland (Presi- 
dent The National Street Railway Association), 
New York City; Lewis Nixon (Proprietor Crescent 
Shipyard), New York City; Marcus M. Marks 
(President National Association of Clothing Manu- 
facturers), New York City; James A. Chambers 
(President American Window Glass Company), 
Pittsburg; William H. Pfahler (former President 
National Founders' Association), Philadelphia. 



xxxiv Introduction 

On the part of zvage-earners : Samuel Gompers 
(President American Federation of Labor), Wash- 
ington; John Mitchell (President The United Mine 
Workers of America), Indianapolis; Frank P. Sar- 
gent (Grand Master Brotherhood of Locomotive 
Firemen), Peoria, 111. ; Theodore J. Shaffer (Presi- 
dent Amalgamated Association of Iron, Steel, and 
Tin Workers), Pittsburg; James Duncan (General 
Secretary Granite Cutters' National Union), Boston ; 
Daniel J. Keefe (President International Longshore- 
men's Association), Detroit; James O'Connell, 
(President International Association of Machinists), 
Washington; Martin Fox (President Iron Moulders 
Union of North America), Cincinnati; James M. 
Lynch (President International Typographical 
Union), Indianapolis; Edw. E. Clark (Grand Chief 
Conductor Order of Railway Conductors), Cedar 
Rapids, Iowa; Henry White (General Secretary 
United Garment Workers of America), New York; 
W. MacArthur (Editor Coast Seamen s Journal), San 
Francisco. 

In the brief period since its organization com- 
mittees of this body have already adjudicated and 
reconciled three disputes between employer and 
employed. 

It will be seen from this sketch that the organiza- 
tion and application of voluntary arbitration has 
advanced at a rapid rate in the last few years, and 
by a peculiarly American method. 

Profit and Stock Sharing. — An essential to 
arbitration is some mutual understanding of em- 
ployers and employed, and the increasing application 



Introduction xxxv 

and success of arbitration shows that such mutual 
understanding is on the increase. But this mutual 
understanding and rapprochement may be effected 
and has been sought by other means than trade agree- 
ments, conciliation, and arbitration. Such means 
are prosperity sharing, profit and stock sharing, co- 
operation, and the like. We have, therefore, given 
one section to model industries, including these 
various plans of industrial betterment. 

Socialism and Single Tax. — One section has 
been devoted to the discussion of the relations of 
employers and employed from the standpoint of ad- 
vocates of socialism and of the single tax. No one of 
the writers in this division professes to offer a 
panacea for the social ills which all recognize. Two 
consider the " single tax" a necessary step on the 
road to betterment, but only as part of the pro- 
gramme of abolition of special privileges. The 
avowed socialists are most moderate in their claims. 
Some write about the ''irrepressible conflict" be- 
tween capital and labor, between rich and poor, 
holding that this conflict can never be brought to an 
end so long as the present organization of our social 
and industrial system prevails; not that the in- 
terests of employer and employed are not mutual, 
but to their thinking that mutuality can never be 
made effective under the existing system of society. 
The abolition of competition and common owner- 
ship are, according to them, necessary to make that 
mutuality effective. Others, moving more slowly in 
the same direction, urge governmental ownership 
and governmental operation of public franchises, 



xxxvi Introduction 

railroads, and street railroads, gas, electricity, ex- 
press service, etc., and perhaps also of public 
monopolies. Outside of the avowed socialists not 
a few advocate in their general discussion part at 
least of the socialist programme; and it is worthy 
of note how strong is the tendency of thinkers and 
practical men alike to insist that our national spirit 
of individualism must yield in some degree to col- 
lectivism. Some of our contributors have recorded 
instances of co-operation without governmental 
control ; of joint ownership and control by employer 
and employed, if, under such circumstances, the 
designations employer and employed can still be 
applied ; of the association of employer and em- 
ployed in trade boards, where, both sides being 
fully organized, the employers in associations con- 
trolling their trade, the employed in labor unions 
controlling the workmen in that trade, elected rep- 
resentatives of employers and employed constitute 
a joint board to consider the conditions of the busi- 
ness, and to make arrangements, mutually satisfac- 
tory to both sides, governing their relations to one 
another. While there is a considerable difference 
between socialism at one end and association in 
trade boards at the other, there is, it may be pointed 
out, this idea which is common to both, and which 
is, after all, the one fundamental thing brought out 
in this part of the discussion — that it is absolutely 
essential that employer and employed be joined to- 
gether, that they be in touch with one another, that 
they understand and sympathize with one another, 
in doing which they must inevitably realize the 



Introduction xxxvii 

mutuality of their interests and thus prepare the 
way for any changes of social conditions which may 
ultimately prove necessary. 

Views of Mr. Hewitt. — During the course of 
the symposium, I asked the Hon Abram S. Hewitt 
for an answer to some of my questions. He re- 
ferred me to his Iron and Labor, being his Presi- 
dential address before the American Institute of 
Mining Engineers in September, 1890 ; of which, 
with his consent, I made a condensation to be used 
in the symposium. Certain sections of that address 
answer so pertinently and directly the questions 
propounded, and are so thoroughly in accord with 
the general conclusions reached in this discussion, 
that I cite them here : 

"The objection to trusts is not to be found in the 
magnitude of their operations. This, in the modern de- 
velopment of industry, is unavoidable, and constitutes, 
in fact, an advantage to society by insuring lower prices 
and better quality, and to the workmen by providing the 
best appliances for labor and arrangements for the pre- 
servation of health and the increase of comfort. It is 
only when trusts attempt to create a monopoly and suc- 
ceed in destroying competition that they become in- 
jurious to the public welfare. It is extremely doubtful 
whether it is possible to maintain in this country an 
effective monopoly of any staple product of industry. 
The concentration of business, however, in special lo- 
calities and the consolidation of interests in order to 
secure efficiency of administration is a public benefit. 
The greater the organization and the larger the capital 
employed, the more certain it becomes that the business 



xxxviii Introduction 

will be steadily prosecuted, thus avoiding the greatest 
evil under which workmen suffer — lack of constant em- 
ployment. The principle of association developed in 
great industrial corporations is therefore altogether bene- 
ficial, and should have the hearty sympathy of the public 
and especially of the labor organizations. 

" In any previous period of history such vast establish- 
ments might have been converted into devices for op- 
pressing the workman, and for preying upon society by 
excessive prices; but in the presence of powerful labor 
organizations, whose right to demand information and 
whose power to obtain justice is now conceded, no op- 
pression is possible, and no exaction can be continued 
under the scrutiny of an omnipresent and omniscient 
journalism. Society has therefore nothing to fear from 
the growing tendency of workmen to form unions, and 
of capital to centralize in great industrial corporations. 
But society has a duty to perform in the enactment of 
legislation which will regulate these organizations by a 
clear definition of their respective rights and duties. 

" Publicity, inspection, and discussion are the great 
safeguards which the public can apply, in order to cor- 
rect abuses and avoid conflicts and disastrous losses." 

" All organizations which avail themselves of the pro- 
visions of the law for the creation of corporations, should 
be required to report the result of their business and be 
open to the inspection and scrutiny of public officers 
appointed for the purpose. This principle is already 
recognized and enforced with reference to savings and 
other banks, insurance and trust companies, and railway 
corporations. It has not been applied to industrial 
organizations; but these now exist on so large a scale 
and employ so many men, disputes with whom affect the 
public convenience and interests so seriously, that every 



Introduction xxxix 

safeguard should be applied to prevent the disturbance 
and dislocation of industry. Publicity as to profits and 
losses would at once remove the most serious cause of 
strikes, which often take place w T hen it is impossible for 
the employer to concede the demands of his men, be- 
cause his profits will not warrant the concession. With 
proper information, the intelligence of the workmen may 
be relied upon not to make an issue which can only re- 
sult in failure. 

" It will not be necessary to give any compulsory power 
of rectification to the officers charged with the duty of 
inspection. No real abuses can survive the criticism of 
the press when they have been fully investigated by an 
impartial tribunal. No strike can then succeed, unless 
it is based upon an abuse recognized and reported as a 
positive grievance by competent authority, all trade regu- 
lations and the rate of wages can then be safely left to 
voluntary agreement between the representatives of 
masters and men, sitting as equals in a board of concili- 
ation, and presided over by an arbitrator who has the 
confidence of both." 

" With industry under the control of great corpora- 
tions endowed with adequate capital, with the workmen 
thoroughly organized to protect their rights and advance 
their interests, with proper public inspection and pub- 
licity as to the condition and results of the business, 
with legislation covering the grounds of conflict, and 
with the co-operation of the judicial arm clearly ex- 
pounding and steadily enforcing the law, it does not 
seem difficult to forecast the outcome of the evolution 
which is going on in the industrial world, and which 
seems to be full of promise and encouragement under 
the beneficent law which Edward Atkinson discovered, 
and which he and Robert Giffin have demonstrated, to 



xl Introduction 

wit: That labor is receiving a steadily-increasing share 
of a steadily-increasing product; and that capital is re- 
ceiving a steadily-diminishing share of an increasing 
product still insuring for it an adequate remuneration. 

" More than fifty years ago, John Stuart Mill laid down 
the proposition that: when employers and employees had 
a common interest in the work, in the nature of a part- 
nership, the means would exist of ' healing the widening 
and imbittering feud between the class of employees and 
the class of capitalists.' Since these words were written 
the feud has widened and the conflicts have become 
more frequent and more intense. On the other hand, 
the work of educating both employers and workmen has 
been going on in a bitter school of experience. Various 
attempts have been made to get the two classes together 
on some basis of organization which will make the re- 
muneration of each directly and visibly dependent upon 
the profits of business. Under the existing system, 
wages are necessarily paid out of profits in the last 
analysis, but the rate and amount are not determined by 
the actual results from day to day. On the other hand, 
they constitute a prior lien upon the business, as well 
from necessity as now by law, and are thus exempt and 
guaranteed against the losses of the business. 

" The workman, however, fails to perceive that he is 
thus dependent upon the profits in order to get wages, 
and that he has the preference over all other claims upon 
the product of the business. Hence the sense of per- 
sonal interest is lacking, and the success of the enter- 
prise forms no part of the workman's current of thought. 
He has, in fact, no means of knowing the condition of 
the business, and his individuality is lost in the vast 
aggregation of energy which is combined in order to 
produce the results of modern industry. In England, 



Introduction xli 

it is notorious that the action of the trade unions has 
been exerted in the direction of obliterating the indi- 
vidual to such an extent that special skill is rapidly de- 
clining, and in the finer grades of work it is almost 
impossible to find the experience required for the pro- 
duction of instruments of precision. This is a national 
evil of the first magnitude; and its disastrous conse- 
quences are becoming more apparent to the intelligent 
workman whose opportunities to rise in life are thus 
abridged and destroyed. 

"Slowly but surely, therefore, a new idea has been 
taking root in the industrial mind. Profit-sharing is 
getting to be a familiar thought both with employers and 
workmen, and many promising experiments are now in 
progress in this and other countries. The practice is to 
pay the current rate of wages in the usual manner, then 
to allow a reasonable percentage on the capital em- 
ployed, and, if there be any excess after these payments, 
to divide it equally or otherwise between the capital and 
the labor, estimated by the amount of wages paid." 

" But profit-sharing, as it is called, will never be popu- 
lar with the workmen, because, on the face of it, it is an 
act of grace from the employer. A self-respecting work- 
man is not willing to accept charity. What he wants is 
justice, and any concession from the employer which 
does not recognize the right of the workman will be, and 
ought to be, rejected by independent and self-respecting 
men. When a workman, however, becomes a share- 
holder, either by payment for stock or by an agreement 
to pay for it out of his earnings, he stands on a level 
with the capitalist, and in fact, as well as in theory, is in 
a position to feel that he is working for himself in doing 
his best to promote the success of the business in which 
he is engaged. 



xlii Introduction 

"It should be a matter of congratulation, therefore, 
that the formation of trades-unions contemporaneously 
with the rapid growth of large corporations whose stock is 
divided into such small shares as to admit of easy distri- 
bution, clears the way for the new era when every in- 
telligent workman will insist upon being an owner, and 
every well-managed corporation will see that its work- 
men are directly interested in the results of the business. 
To effect this desirable end, no compulsory legislation 
and no addition to the powers of corporations are needed. 
The educational influence of the conflicts which have 
occurred has already done much, and the conferences 
which frequently take place as to wages and regulations, 
are doing more to establish a better understanding, to 
create harmonious action and to develop the idea that 
business cannot be carried on, unless both the capital 
and the labor employed share directly in the proceeds. 
The two classes are organized, as it were, into armies of 
observation, and occasionally they come into conflict, 
but the chances of collision are becoming daily smaller 
and will disappear altogether when their differences are 
merged in a sense of common ownership through the 
agency of corporations, admitting and cultivating the 
direct participation of the workmen in the profits. 

" It is, however, by no means necessary that all work- 
men should thus become shareholders. There will 
always be a considerable element of an unstable and un- 
intelligent character, whose participation in the owner- 
ship is neither desirable nor possible; but I think the 
time is near when it will be discreditable to a workman 
not to be also an owner in the establishment in which he 
works, and that all workmen of the better class will have 
such an interest. It is quite conceivable that the work- 
men may ultimately acquire the preponderating interest, 



Introduction xliii 

in which case the best possible solution will have been 
reached, in which labor hires capital at the lowest pos- 
sible rate and thus becomes the main factor in the con- 
duct of industry." 

"lam fully persuaded that the conflict between capi- 
tal and labor cannot go on without impeding, and finally 
paralyzing, the operations of the industrial world, and 
interrupting the continued progress of society in wealth, 
comfort, and civilization. . . . Industrial peace is 
. . . necessary to the fruition of the hopes of a better 
adjustment of social relations, and of progress which 
will remove all privilege and all artificial impediments to 
the final establishment of equal rights. It is encourag- 
ing to think that this result can be reached without seek- 
ing for any new principles of government or introducing 
any new methods of legislation. Natura viam monstrat. 
We have no more reason to fear association than we have 
to dread competition, for they are the necessary and in- 
separable factors of progress. . . . They are only in the 
infancy of their power, and no man can measure their 
potency in overcoming the evils which survive or which 
have been incidentally occasioned in the application of 
the natural forces in new directions. If we are careful 
to secure the maintenance and the application of indi- 
vidual energy, we have nothing to fear from association 
and combination. Participation in the ownership of the 
instruments of production and the agencies of distribu- 
tion, rendered possible through the subdivision of the 
shares of the great corporations which control the domain 
of industry, will give the workmen who are employed in 
their conduct full scope for individual energy and the 
development of special skill in every department. The 
general distribution of shares is, therefore, to be en- 
couraged as the true solution of the conflict between 



xliv Introduction 

capital and labor, and may be relied upon to bring peace 
out of contention without resorting to the exasperating 
fallacies of communism, or the dangerous tendencies of 
class legislation." 

Profits. — Inasmuch as the symposium out of 
which this book grew and the book itself arose from 
the desire to contribute toward the better under- 
standing by one another of employer and employed, 
it has seemed fitting to stipulate that the profits 
derived from it should be applied to settlement or 
other similar work in New York. 



John P. Peters. 



St. Michael's Church, New York, 
January 29, 1902. 



PART I 
GENERAL 

a. How shall Labor and Capital be Reconciled? 

b. Are the Interests of Employer and Employed 

Mutual, and, if so, how can this Mutuality of 
Interests be made Effective? 



HOW SHALL LABOR AND CAPITAL BE 
RECONCILED ? 

Education the Solution 

by henry davies 

MY answer is, By the influence of education. It 
is mutual misunderstanding of each other 
that divides capital and labor, and there is no way 
of overcoming this obstacle to permanent peace ex- 
cept through education. 

But let us justify this conclusion. 

It is necessary, first of all, to recognize the great 
complexity of the problem involved. The question 
is not wholly a question of material and financial in- 
equality; there are social, ethical, and spiritual ele- 
ments mixed up in it; it is a question of industrial 
freedom, and, as Daniel Webster said, the safeguard 
of freedom lies in the educated intelligence of the 
nation — intellectual, moral, and spiritual. 

As a preliminary condition of a true and perma- 
nent solution of this problem, so complicated in its 
nature, the contending parties must also recognize 
the community of their interests. The trouble is, 
in my opinion, largely, that capital and labor are 
arrayed in two opposing camps, like two armies 

3 



4 Education the Solution 

preparing for battle. The insolence of wealth has 
brought this condition on, almost as much as the 
ignorance and demagogy of labor. What is the 
fact? Capital and labor are mutually dependent 
interests. 

In the dispute as to the equitable distribution of 
the profits of labor, it should be more generally ac- 
knowledged that reason alone can be the arbiter, 
and for the right use of reason educated sentiment is 
absolutely essential. These things (the extreme 
complexity of the problem, the need of concession 
on both sides, and the arbitration of reason) should 
be recognized as the basis of conference. If these 
things be acknowledged, it will be clear why edu- 
cation holds the key to the problem and its solution. 

I use the word "education" in the large untechni- 
cal sense — not as applying to academical training 
only, but also as including the whole process through 
which a society passes on its way toward a greater 
degree of harmony and perfection. Individualism, 
which has been and is still the American ideal of ed- 
ucation, must be limited, according to this defini- 
tion, by the larger questions of a man's social 
relations, by his political duty, and by his personal 
efficiency in the system of things ; all this as brought 
about by growth of personality and experience, and 
by the natural evolution of human life under the in- 
stitutions of civilization, is what I mean by education. 

That education, in this sense, holds the key to the 
problem we are considering, can be made clear in a 
great variety of ways. It can be shown, first, by 
calling attention to the fact that it is education that 



Henry Davies 5 

has precipitated the problem. Education has 
brought about a larger self-respect among the work- 
ing people. In this work the United States has 
taken the lead. We can no longer think of the 
hand-worker as an inferior — as was the habit in times 
when civilization depended on the domination of an 
educated 400. The Demos has arrived, and he is ed- 
ucated and enlightened. What more natural, then, 
than that he should begin to value his own person- 
ality, his own comfort and well-being at a higher 
worth? 

To effect any change in the relations between 
capital and labor you must, therefore, by a compre- 
hensive and generous reliance on educated senti- 
ment, change the attitude of the individuals 
involved. No great reform or revival of any sort 
was ever accomplished without the inspiration of 
new ideals in character and life. And this involves 
education. 

It is not good, it is not safe for society, that the 
relations of human beings should be polarized as they 
are at present. This violent antagonism between 
the forces of power (wealth) and the forces of useful- 
ness (labor) inevitably leads to the effort of power to 
exploit usefulness, and this the latter, in proportion 
as it becomes educated, resists. All progress comes 
by resistance, however, but to be truly efficient and 
productive two things are necessary in this work — 
both freedom and moral ideals. Labor is, perhaps, 
as much exposed to the charge of trying to assimi- 
late the power wielded by capital as capital is to the 
charge of manipulating labor for its own selfish ends. 



6 Education the Solution 

Education, alone, promises the best solution of this 
antagonism, because education frees the mind from 
prejudice and ignorance, draws men together in right 
relations, and leads to social efficiency. 

It is essential to the thorough solution of this 
problem, therefore, that the discussion of it — which 
is no small part of the education of which I am 
speaking — get to the roots, which lie deeply em- 
bedded in human nature. As I have hinted above, 
the problem is not wholly a question of the equitable 
division of the proceeds of capital and labor. There 
are moral issues involved. No scheme of legislative 
control can ever successfully define or limit the re- 
lations of capital and labor. What is needed is an 
educated sentiment of what is morally right and re- 
ligiously honest, as well as a sense of legislative and 
financial equity. 

Too often it is assumed that the great questions 
involved in the discussion are quantitative ; whereas 
the most important factors in the solution, as the 
steel strike has shown us, depend upon the qualities, 
moral and intellectual, which have been displayed 
on both sides. No one can say that a higher level 
has not been attained in this last case over any 
previous strike. 

How to educate the wealthy class so that they 
realize the moral and spiritual obligations of their 
immense power is the root of the financial problem 
of our times. How to educate the hand-worker so 
that he, on his part, realizes that his interests, also, 
are of the moral sort, is its counterpart. The edu- 
cation needed to a solution is chiefly in the direction 



Henry Davies 7 

of the morality of the relations existing between 
capital and labor and society at large. Bad business 
is always bad morals. Strikes are as much moral 
phenomena as financial facts. 

The change of relations in human nature which I 
have mentioned must be gradual, like every other 
revolution in human relations. This process is likely 
to take the following course: 

i. There is the preliminary stage, when capital 
and labor come to recognize their respective spheres 
of influence, different yet related, diverse yet unified. 

2. Then there is the stage of opposition, the crisis 
of antagonism, when the equilibrium is lost. 

3. These two stages are followed by the stage of 
reconstruction, readjustment, and higher social effi- 
ciency, which follows the critical stage. 

The first of these stages we have now nearly com- 
pleted. It has been coming on for many centuries, 
and culminated in the Industrial Revolution. We 
are, therefore, in the transitional state passing into 
the stage of crisis. Capital and labor cannot escape 
the tragedy of this crisis. It can only be faced and 
turned to good uses by the forces of evolution and 
education. The critical process may be brief, or 
it may be prolonged. Some do not hesitate to pre- 
dict catastrophe and downfall. The point is that, 
whether short or long, the crisis will be the most 
educative experience in the whole history of the re- 
lations of capital and labor. All previous stages will 
appear palliative in comparison. 

It is not necessary to believe, and I for one do not 
believe, that the crisis will be terrible. Our people 



8 Education the Solution 

are intelligent. Nevertheless, it should be remem- 
bered that the human race, youngest of all nature's 
offspring, is most erratic and uncontrollable. I be- 
lieve, however, that education will have the neces- 
sary influence to quell and still the warring elements 
and teach us to recognize that all social life is based 
on the imitation of the best, and that the best way 
of solving our social problems is to rely on reason, 
moral suasion, and that more excellent way advo- 
cated by Paul. 

The acute stage of the crisis, the stage where the 
tragedy of human conflict will be most impressive, 
will pass, and the result will be a better understand- 
ing of each other, a purified and more generous rec- 
ognition of the unity of interests involved in capital 
and labor, and a clearer consciousness that "eternal 
peace" is a nobler ideal to strive for than war. We 
shall also be taught that absolute power is no more 
tolerable in a commercial corporation than in an em- 
peror, a church, or a pope. Power is wrongly used 
when it is not subservient to useful and benevolent 
ends. In this crisis there will surely be loss on both 
sides, but it will be more than justified if the above- 
mentioned results come out of it. 

By the same climactic educational process, our in- 
dustrial citizenship will be changed in meaning. 
One of the things that will result from this tragedy 
which is now being enacted in the world will be 
freedom from conditions that gall upon the honest, 
intelligent, and law-abiding worker. The idle 
rich will be an impossibility in the coming re- 
public, for there is no theory that can defend 



Henry Davies 9 

the existence of a class that exists simply on its 
money. If I were a hand-worker what would gall me 
more than anything else would be the assumption 
of superiority and the ingratitude and insolence of 
the rich. What we need is an aristocracy of work- 
ers. Hand-workers, however, should remember that 
freedom from the conditions mentioned involves 
risks to themselves, the most serious of which is the 
chance to tyrannize. Education alone can teach the 
right use of power and liberty, for education involves 
self-control, morality, and love. 

The crisis will serve to direct attention also to the 
need of reconstructing some of the laws affecting the 
relations of capital and labor. Money, we shall 
slowly see, must not be invested with political 
influence as well as productive material power. 
No corporation ought to have the power to buy 
legislation. 

But these evils cannot be eradicated without a 
crisis, and into that we have drifted. Let us hope 
that equal laws for all will be the result of the edu- 
cation we shall get out of our experience. If this is 
not the result, the solution of the problem of capital 
and labor will be only partial, postponed to a further 
crisis. 

As regards the distinct form which the third or 
reconstruction period will take, — whether socialism, 
imperialism, or a purified republicanism — no one can 
at present say. There is no doubt that the next 
form of political society to claim attention is the 
socialistic, as it is the most popular and serious of 
any now before the educated minds of this country. 



io Education the Solution 

But it is not the purpose of this article to try to lift 
the veil from the future. Our problem is with the 
present stage of crisis. 

These three stages — the preliminary, the critical, 
and the reconstructive — are not isolated, but depend 
on each other. In all three labor and capital will, 
through education, come to a gradual comprehension 
of each other's aims through a better understanding 
of each other's united interests; through a more in- 
telligent recognition of the basis of all legitimate 
political and social influence — work with brain and 
hand ; and through a more reasonable comprehen- 
sion of the relation of labor and demand to profit- 
sharing. 

The complicated nature of the problem, involving 
a readjustment of individual and social values, de- 
mands, as an essential condition, the pushing of 
every educative agency to its utmost capacity, so 
that we may know, when our hour is come, what we 
ought to do. I would, therefore, suggest that it is 
the duty of every one to help the solution of the 
problem by the intelligent study of the question. 
And you can learn in other ways than from books, 
— viz., by getting into closer quarters with the toil- 
er's daily life, by sharing the burden of labor with 
him and for him as he does with and for you. The 
rich in particular are under special obligation to know 
something besides the higher or "pure" mathe- 
matics of finance. They need to know the realism 
of the industrial problem. 

Educated social action is the only solvent, but 
this depends upon the attention and interest taken 



Henry Davies n 

in the subject by individuals. Churches and col- 
leges should also free themselves from the suspicion 
of favoring one side of the dispute, by sympathizing 
with, and seeking to bring comfort and light out of, 
the inevitable suffering involved in the crisis. As- 
sociated philanthropic enterprise is an element of 
education not to be undervalued in the reconcilia- 
tion which we seek. Why should not ministers of 
religion universally preach a sermon on Labor Day? 
What an immense educative influence this would be, 
provided it was used wisely, in a non-sectarian and 
brotherly way ! 

Absolute sincerity on the part of all who seek to 
take any action looking toward the reconciliation is 
a final demand which we have a right to make. It 
is much in this problem, it is half the battle, to seek 
the right conditions, the special social atmosphere, 
the spiritual climate, so to speak, in which these 
problems may be successfully grappled with, and the 
key to them all lies at our hands, viz., in a large use 
of the great educative forces at work among us. 
This, rather than any unique or startling system of 
change, is the writer's hope, and the ground of his 
faith in the possibility of reconciling capital and 
labor. 

The education of the people has precipitated the 
problem, and, as like cures like, education is the 
potent force to be relied upon in endeavoring to 
unite and consolidate the interests of capital and 
labor. Philosophers, poets, and prophets alike agree 
in this. Humboldt said: "If you wish to see any 
result in the social life of a people, you must first 



12 Education the Solution 

put it into their education." Lowell, in one of his 
greatest poems, "The Cathedral," propounds and 
answers the question in the same way. And was 
it not a greater than either of these who said : "And 
the truth shall make you free "? 



ARE THE INTERESTS OF EMPLOYER 
AND EMPLOYED MUTUAL, AND, IF 
SO, HOW CAN THIS MUTUALITY OF 
INTERESTS BE MADE EFFECTIVE? 

Duel or Duet? 

by josiah strong 

DUEL or duet, that is the question. There 
ought to be unending harmony between capi- 
tal and labor; as a matter of fact, there is almost 
unending strife. This is due to the very common 
failure of working men and their employers to rec- 
ognize that their interests are mutual. 

The head, the hands, the feet, have common in- 
terests. If one member suffers, all the members 
suffer with it. All portions of the body are served 
in common and built up by the blood, which, like 
money, is "the circulating medium." If one arm 
does more work than the other, it draws more pay; 
that is, it draws to itself more blood, with the result 
that it gets more growing material and hence be- 
comes stronger than the other. Just in proportion 
as the brain works, it draws blood to itself and is 
built up. The more any member spends by its ac- 
tivity, the more is it compensated ; so that the body 

13 



14 Duel or Duet 

has what might be called a self-adjusting wage sys- 
tem which is perfectly equitable. 

Now suppose there takes place what St. Paul calls 
a ''schism in the body "; that is, a division. For- 
getting that they are mutually dependent, that their 
interests are common, the eye says to the hand, "I 
have no need of thee " ; or the head says to the feet, 
"I have no need of you " ; or hands and feet organ- 
ize a strike against the head and refuse to feed it. 
How much added strength would the muscles get 
by refusing food to the mouth? 

Or, we will suppose that the self-adjusting wage 
system of the body gets out of order, with the result 
that there arises a dispute between the brain and the 
limbs as to which is entitled to most of the "circu- 
lating medium." The limbs say: "Anybody can 
see that we are the workers ; we produce the results. 
Let the brain try to swing a pick, or climb a ladder, 
or plough a furrow, or carry a load without us, and it 
will discover that we do the world's business and 
create the world's wealth." Accordingly, the mem- 
bers by some combination succeed in drawing to 
themselves much of the blood which belongs to the 
brain. In consequence the brain becomes weakened 
and does not intelligently direct the movements of 
the limbs. And if this robbery of the brain goes 
far enough, there follows unconsciousness, the man 
"faints away" ; then how much is all the muscular 
power of the limbs worth? 

Or, we will suppose that the head becomes selfish 
and proposes to build itself up at the expense of the 
limbs, on the ground that they are mere machines 



Josiah Strong 15 

and represent nothing but brute strength; that it is 
the brain which produces the arts and sciences and 
the progress of civilization, and has all the wants of 
civilized life, and, therefore, needs most of the 
"circulating medium." It draws more and more of 
the blood to itself, with the result that the efficiency 
of the limbs is impaired ; the health of the whole body 
(including the head) suffers; and if the rush of blood 
to the head is sufficiently aggravated it produces 
apoplexy; the brain loses all power of thought 
and enjoyment, and the whole man is prostrated. 

Thus in each case selfishness overreaches itself. 

Of course, the value of this analogy depends on 
the fact that a modern industrial society leads a 
common life, which fact is not appreciated by either 
employers or employed. They do not yet recognize 
the full meaning of organized industry. 

In the old days, when muscles furnished power, 
each man had his own, and industry was individual- 
istic. But machinery and the division of labor, 
which followed the concentration of power in the 
steam engine, made men mutually dependent; and 
as far as interdependence goes common interests go. 
This interdependence has come to include the entire 
industrial society; hence, the entire industrial so- 
ciety has come to live a common life with common 
interests. 

This is recognized in part. Working men are com- 
ing to see that the interests of labor are common. 
This was first discovered by men engaged in the 
same industry, who, accordingly, organized their 
unions. Then men in different but interrelated 



16 Duel or Duet 

industries saw that they had much in common, and 
different unions became affiliated. Then, as they 
began to see the common interests of all labor, there 
was a movement toward national and even inter- 
national federation. 

Capital has been moving in the same direction. 
The first step toward combination was the partner- 
ship; then, the corporation; then, the combination 
of corporations in increasing numbers and magni- 
tude, until there is developed at last a trust as broad 
as a continent. 

As long as these two great organized armies believe 
their interests are conflicting, they will struggle to- 
gether with as much resulting loss and perhaps with 
/7as much consequent suffering as attend a bloody 
/ conflict of arms. 

Glance, then, briefly at some of the common inter- 
-'yests of capital and labor. 

i. Both profit by general prosperity. When times 
are good, business is good, profits are good, and 
wages are good. A strike or lockout, if it is suffi- 
ciently general and prolonged, destroys general pros- 
perity and injures capital and labor alike. 

2. Both profit by cheap production. The manu- 
facturer seeks to reduce cost in order to get the 
market; and cheaper production reduces the cost of 
living to working men. For the workman, therefore, 
to waste time or material is as really against his own 
interests as against those of his employer. 

3. Both profit by the introduction of machinery, 
because this cheapens production. It often throws 
men out of employment, but ultimately gives more 



Josiah Strong 17 

employment than it takes away. Machinery has 
undoubtedly increased the profits of capital and the 
wages of labor, and at the same time has reduced 
the hours of labor. 

4. Both are benefited by good wages. It is an 
advantage to capital to employ workmen who can 
command good wages. This is one of the great ad- 
vantages which manufacturers in the United States 
have over those of Europe. Then, too, the larger 
the wage the higher is the standard of living, which 
increases demand. 

5. Both are benefited by the health of the work- 
men. The less sickness, the fewer interruptions; 
the more health, the greater vitality and strength, 
and the larger the product. 

6. Both are profited by a high degree of intelli- 
gence. It insures better management, more 
economy, quicker and better work, fewer misunder- 
standings. 

7. Both profit by high moral character. There is 
more conscientious work; there is greater mutual 
confidence and good-will. Ignorance and moral 
degradation are dangerous. As Danton said: "If 
you suffer the poor to grow up as animals, they may 
chance to become wild beasts and rend you." 

Perhaps the truth of all of the above propositions is 
sufficiently obvious except the third. It is often 
hard for workmen to see that the machine which 
takes away their job is of any benefit to labor. If 
it is a "blessing in disguise," it is so thoroughly dis- 
guised that multitudes fail to recognize it as a bless- 
ing, except to the capitalist who is able to own it. 



1 8 Duel or Duet 

It is worth while, then, to consider what the intro- 
duction of machinery is bound to do for labor. 

It is by the aid of machinery that man is enabled 
to utilize forces other than muscular. The earth has 
always been a vast reservoir of power, capable of 
affording man an exhaustless supply in the form of 
steam, electricity, water, wind, air, gas, and the like. 
But for thousands of years this reservoir remained 
untapped. Agriculture, the mechanical arts, travel, 
and transportation, all depended on vital force — 
power derived from the muscles of man or beast. 
This was practically the only power under human 
control ; and on the part of a large proportion of 
mankind the struggle for existence taxed this power 
to the utmost. Now, gaining control of natural 
forces made it possible to relieve the vital energies 
of the race of this deadening tax, and thus marked 
a long step in advance. 

Vital energy may be expended by the muscles, 
the nerves, or the brain ; that is, in muscular ac- 
tivity, in feeling, or in thinking; and of course 
strength expended in any one of these -three direc- 
tions is not available for use in either of the other 
two. When a man is exhausted by physical toil, the 
finer sensibilities and the power of thought are well 
nigh dead within him. Here is the poet's picture 
of the typical peasant : 

The emptiness of ages in his face, 
And on his back the burden of the world. 
Who made him dead to rapture and despair, 
A thing that grieves not and that never hopes, 
Stolid and stunned, a brother to the ox? 



Josiah Strong 19 

Muscular toil, prolonged to exhaustion, has 
robbed the peasant's brain and nerves of that vital 
energy which should have given to him man's high 
prerogatives of thought and feeling. For thousands 
of years the toiling millions have been condemned 
by the hard conditions of life to an existence chiefly 
animal. How much it meant, then, for the hope 
of humanity, when man learned to harness nature's 
forces, and was thus released, not from labor, but 
from the curse of labor — that excess of toil which 
destroys the balance of manhood and robs him of 
his higher self. True, excessive toil still stunts hu- 
man life even where machinery is employed ; but the 
tendency is to shorten hours of labor and to substi- 
tute machinery for muscle, requiring of the work- 
man a service which exercises his intelligence rather 
than his strength. The century before us will cer- 
tainly lay more and more of the drudgery of life on 
machinery, thus saving vital energy for higher uses. 

Again, gaining control of nature's forces increases 
human resources indefinitely, thus opening to man- 
kind boundless possibilities. When muscles were 
the only source of productive power, the inexorable 
law of nature was : So much food, so much sweat ; so 
much clothing, so much sweat ; so much fuel, so much 
sweat. Except in the tropics, nature yielded the 
necessaries of life only in exchange for vital energy, 
the natural limit of which, of course, limited produc- 
tion. This energy was exhausted day by day. So far 
as productive power was concerned, the world went 
to sleep every night practically bankrupt and beg- 
gared, and awoke every morning to begin life anew. 



20 Duel or Duet 

To-day, the four great manufacturing nations — 
the United States, England, France, and Germany 
— have steam power alone greater than the muscular 
strength of all the male workmen of mankind; and 
this power can be increased indefinitely, as fast as it 
can be used. It has now become possible to pro- 
duce more than the world can consume. Men go 
hungry and ragged, to be sure, but only because 
they have nothing with which to buy; it is not be- 
cause there is any lack of food and clothing. Tap- 
ping the earth's great reservoir of power solved the 
problem of production and made possible universal 
abundance. The great problem remaining is that 
of distribution. 

During the past century the industrial revolution 
has carried us half-way to the industrial millennium. 
There will, of course, be further material develop- 
ment, but if it were finally arrested at this point, the 
physical conditions have already been prepared for 
a practically perfect civilization, provided only the 
intellectual and the spiritual were raised to an equal 
development with the physical. It is estimated that 
on the average the machine method is about fifty 
times as effective as the old method. That is, man 
with his hand on nature's lever, at the beginning of 
this century, is about fifty times as capable of sup- 
plying his material wants as he was one hundred 
years ago. And as we better understand the physi- 
cal conditions of moral progress we shall better 
appreciate how full of hope for humanity is the 
twentieth-century outlook. As the spirit of human 
brotherhood prevails more and more, selfishness will 



Josiah Strong 21 

subside more and more, the product of labor, man- 
agement, and capital will be more and more equally 
divided, there will be abundance for all; and the 
drudgery of life having been laid on the steel mus- 
cles of machinery, man's vital energy will go to 
the development of the higher sensibilities and the 
power of thought. That is, forces are now at work 
in the world which will some day enable labor to 
share not only the material comforts and luxuries of 
life, but also the delights of intellectual training and 
of refined tastes. 



PART II 

COMBINATIONS OF EMPLOYERS AND 

EMPLOYED— ARE THEY MUTUALLY 

BENEFICIAL ? 

a. Are So-called Trusts, or Giant Incorporations, 

Beneficial to Employed as well as to Employer? 
How? 

b. Are Labor Unions Beneficial to Employer as well 

as to Employed? (Suggestions how they might 
be made beneficial or more beneficial.) 



23 



TRUSTS 



Clark. Question is how trusts affect market rates — To secure 
higher prices, trusts limit production — May pay higher wages, 
yet reduce wages in general — So far as monopolistic, dangerous 
— Labor unions; monopolistic possibilities — Combination of 
trust and labor union against public. 

Dill. Object of trusts is to dominate the market — Are not and 
cannot be monopolistic — Safeguard of trusts, publicity — This 
must be obtained through national legislation — Diversity and 
contradictions of State legislation among serious dangers of the 
situation — Other dangers are corporation meddling in politics, 
speculation by officers and directors in their own stocks. 

Stokes. Publicity demanded — Prohibition by penal laws of inter- 
ference of trusts in politics and legislation, and of speculation 
and secret profits by officers and directors of corporations. 

Peters. Methods by which trust benefits itself and community : 
increased efficiency; economy in distribution and administration 
— Probable advantage to laborers in wages — Large employers 
better to deal with — Trade restrictions condemned — Advantage 
of trusts in foreign competition — Restrictive legislation. 

LABOR UNIONS 



Reynolds. Benefits to employed : fair hours and higher wages ; 
permanent employment ; moral improvement — Benefits to em- 
ployer : intelligent understanding of trouble ; responsible men 
to deal with — Conservatism of labor leaders — Chief trouble of 
unions distrust of leaders — Need of industrial arbitrator. 
25 



26 Labor Unions 

LABOR UNIONS (Continued.) 

Gompers. Necessity of strikes — Strikes last resort — Organization 
of both employers and employed prevents strikes — Unions im- 
prove conditions of labor — Prevent woman or child labor — 
Stand for conciliation and arbitration — Oppose compulsory 
arbitration. 

Keefe. Organization and methods of Longshoremen's Associa- 
tion — Responsibility for agreements and contracts — Joint con- 
ferences with employers — Provisions for arbitration. 

White. Improvement of the individual — Accomplished by unions 
— Means of struggle for living wage — Uplift toiling masses 
and thus society — Complete dominance of unions undesirable 
and improbable. 



TRUSTS 
Do Trusts Benefit Laborers ? 

BY JOHN BATES CLARK 

AT the Chicago conference on trusts certain lead- 
ers of organized labor declared that they were 
not hostile to these consolidations. They said that 
they were waiting to see how the trusts would treat 
their workmen, and that if they treated them well, 
they, the speakers, would favor them. 

This is a common view, and the test that it applies 
to a trust is simply the rate of pay that it gives to its 
own men. It does not take account of the effect of 
the consolidations on the larger body of men who 
are not in their employment. That a trust is kind 
to its own employees is a point in its favor, but it is 
a very inadequate ground for pronouncing a favora- 
ble judgment on its action as a whole. It might pay 
its own men at a high rate and yet injure labor in 
general, and it might pay at the market rate and yet 
benefit the great body of workers. The large ques- 
tion is: How does the trust affect the market rate 
itself? We want to know, not merely how the men 
fare in the mills owned by it, but how they fare in 
mills, shops, and mines and on railroads and farms 
al.l over the country. 

27 



28 Trusts 

Trusts might benefit labor generally. They en- 
sure economy, and that ought to mean that there 
are more goods produced than would otherwise be 
possible and that the workmen get their share of 
them. Unfortunately, however, trusts have a 
further purpose in view. While they wish to save 
what they can in the cost of making their goods, 
they also wish to get high prices for them ; and this 
they can do only by limiting the number that they 
will make. This policy does not tend in the direc- 
tion of a large dividend of useful things for every 
one. It works in just the other way. When it shuts 
up some of its mills and sends off some of its labor- 
ers it makes its own products scarcer than they 
should be. This makes them dear and enables the 
trust to get a profit; but that is no consolation to 
the men who have been turned off. It is anything 
but consoling to the great body of workers who buy 
these products. If, now, the trust placates its own 
men by giving them some share of what it exacts 
from the public, that is good for these laborers, but 
does nothing for others. Having a hostile public to 
face the trust may try to avoid a fire in the rear ; but 
whenever it pays its laborers more than they could 
elsewhere get, it can be trusted to recoup itself by 
taxing everybody else. A worker in any employ- 
ment in which competition rules pays tribute to 
every trust that is a real monopoly. 

The essential thing is that some workers are 
forced out of the trust's field into other fields and 
that they can win admission to the new employ- 
ments only by taking lower wages than would there 



John Bates Clark 29 

be paid if labor were not artificially forced into them. 
Make a trust in the woollen business, close some 
mills, and force some men and women into shoe 
shops, and it is clear that labor in the shoe shops 
will not be as well paid as it was before. 

A real monopoly of any kind injures the general 
body of labor, and selecting a few men for specially 
good treatment does not atone for this effect. A 
trust, however, is not necessarily a monopoly, and 
this is the saving fact in the situation. It affords 
the true criterion for judging trusts and pronouncing 
them good or bad. That is not a good trust which, 
being a real monopoly, treats its own men well and 
others ill. A good trust is not a true monopoly at 
all, and therefore has not any power to plunder the 
public. It cannot favor its own men by sharing with 
them the fruits of plunder, since it has none to 
share. There is one way only in which it can get 
large returns and pay high wages, and that is by 
economy. It can produce efficiently and make hon- 
est gains for owners and workers. High pay secured 
by means of monopoly injures all but the few who 
get it; but high pay secured by efficiency benefits 
all. The ideal state is one in which there is economy 
everywhere and monopoly nowhere. In such a state 
every shop might give high pay to its own men with- 
out taxing others in order to get it. 

Do Labor Unions Benefit Employers? — A 
trade union might conceivably make itself a mo- 
nopoly ; and if it did so it would injure workmen out- 
side of its own membership. It might restrict the 
number of members that it would receive and fight 



30 Trusts 

off all non-union labor from its field of employ- 
ment. This would make labor in one department 
scarce and dear and labor in other departments 
plentiful and cheap. A trade union that should 
admit members freely would have no such power. 
It might promote efficiency without fostering mo- 
nopoly; and if it did so it would be a benefit to all 
concerned. 

A trade union in a business controlled by a mo- 
nopolistic trust may, if it is strong, make the com- 
pany divide gains with it on more liberal terms than 
the men could otherwise secure. The public would 
have the bills to pay, and workmen not in this 
particular union would have to pay a large share of 
them. 

An intolerable state would be one in which real 
monopolies of both kinds should multiply and in- 
crease in power. If trusts were limiting their pro- 
duction and if trade unions were keeping great 
bodies of men out of their own membership, the 
men not employed by trusts and not able to get 
into unions would be ground between the upper and 
the nether millstone. A man of this class might be 
unable to join a union or to make a living outside 
of it. 

Freedom is the word that describes the ideal state. 
Let the young worker enter any trade he pleases, 
and let the man with any capital, small or great, in- 
vest it without peril in whatever industry he may 
choose. Let there be a democracy of labor and a 
republic of capital, which together make true com- 
monwealth. Let there be competition active enough 



John Bates Clark 31 

to prevent all taxing of class by class. Let goods 
become cheap in terms of labor, which is the same 
as causing labor to become dear in terms of goods. 
Let workmen from year to year produce more and 
get more. Let the power of the trust be used for 
economy and efficiency, and that of the trade union 
for collective bargaining and fair play. This will 
insure benefits for all and injuries for none, and such 
is the natural effect of economic freedom. 



TRUSTS 

Their Uses and Abuses 1 
by james b. dill 

THERE is little advantage in attempting to avoid 
the name "Trust" as applied to combinations 
of capital. The word originated in a trusteeship 
created by deed. Later it was applied to associa- 
tions by which the properties were placed in the 
hands of trustees who gave back to the original 
owners trust certificates, conveying a technical title, 
but accompanied by a power on the part of the 
original owner to take back the property in case of 
failure or otherwise. 

The cry against monopolies resulted in legislation 
destructive to this form of organization, but the 
trust left its impress, the advantages of combina- 
tions, and its name, which the public applied to all 
consolidations of capital. 

What a Trust is. — A trust is a "dominant 
combination of money, property, business, or com- 
mercial power or energy. " The form of the union is 
unimportant. It may be an association, incorporated 

1 The original of this article was an address before the Merchants' 
Club of Chicago, November 9, 1901. 

32 



James B. Dill 33 

or otherwise, it may be a single individual or a part- 
nership. The essential element of the combination 
is the purpose to dominate, and this domination is 
the tendency which has created the most appre- 
hension. From a practical standpoint, the differ- 
ence between what was formerly known as a 
"Trust" and what is now known as a "Combina- 
tion " is largely academic and scholastic — a differ- 
ence in purpose, principle, intent, and final results 
not involving great distinctions. 

If the charter of every prominent combination of 
capital or dominant company expressed the real in- 
tent of the organization, instead of reading "To 
manufacture, transport, and market " the particular 
product in question, it would state as the purpose 
of the company "to dominate in the manufactur- 
ing, to dominate in the transportation," and, what is 
quite as important, "to dominate in the market " of 
the product. 

The same tendency and intent to dominate is 
signified by the names of the organizations, "United 
States," "American," "Federal," and finally "Na- 
tional," and even "International." All of this, 
both of structure and of name, indicates a purpose 
on the part of the organization to dominate in the 
markets of the country and of the world. It is not 
the combination in itself which is vicious, but it is 
the methods employed by some corporations in the 
attempt to dominate which create the tendencies 
which are criticised as dangerous. 

Analyzing the situation to-day, and recognizing 
that the combination and the consolidation of capital 



34 Trusts 

is a force, we spend no time in asking why it is here 
further than to say that it is an uplifting force, a part 
of the best growth and sound expansion of the 
American nation. It is essentially a part of the ag- 
gressive American policy of commercial supremacy. 

The tendency toward centralization is strikingly 
apparent in the financial field. The great banks are 
becoming greater and are establishing branches in 
all directions through a stock control of smaller 
banks. One might be charged with lack of conser- 
vatism should he suggest the possibility of the 
establishment of a great bank, perhaps under gov- 
ernmental influence, which shall act as a governor 
and regulator of the financial machinery of this 
country. But the anticipating of the redemption of 
bonds or of the payment of interest by the Secretary 
of the Treasury must be regarded as an expedient 
on the part of the Government to steady the finan- 
ces of this country to the end that panics may be 
prevented. 

Carrying this proposition to its logical extent, and 
having in mind the history of the Bank of England, 
it has been suggested that if and when this country 
becomes the great finance and credit power of the 
world, the trend of sentiment will be towards the 
establishment of one great controlling financial in- 
stitution, certainly under the United States law, and 
perhaps dominated by the United States Govern- 
ment. 

The history of the trust movement is not unlike 
that of the development of electricity. Half a cen- 
tury ago every habitation bristled with lightning-rods 



James B. Dill 35 

in an endeavor to avert electricity — a force then, but 
not at the present time, known best from its dan- 
gerous tendencies. The house of to-day is not 
equipped with instruments to divert the electricity, 
but is wired to receive and utilize the electric cur- 
rent. The difference is not only that the force is 
better understood, but also that it is under control. 
The generation of yesterday paid money to the 
lightning-rod man to keep electricity out of the 
house. They feared the flash and the crash, but to- 
day we pay the electric company to create, store, 
and deliver electricity through wires into the house 
for the purposes of light, heat, power, and commu- 
nication. 

While we convey electricity into our homes, offi- 
ces, and manufactories, yet that current is never so 
conveyed until the conductor is insulated, so that the 
whole force is utilized, while the danger is mini- 
mized. The great question to-day is not, how com- 
binations may be averted, but rather how they may 
be utilized and controlled for the best good of the 
community. 

The dangers of the trust movement may be di- 
vided into dangers to the combinations and dangers 
from the combinations to the public — subjective and 
objective dangers. 

The tendency of the great corporations is to be- 
come in a measure callous to public opinion, a mis- 
take on the part of the corporation, unfortunate so 
far as the public is concerned, and a peril, both sub- 
jective and objective, and in which the corporation 
is by no means blameless. 



36 Trusts 

This indifference to public opinion and legislation 
is due in part to the fact that from the corporate 
point of view many of the criticisms passed upon 
corporations and much of the anti-corporation legis- 
lation are based upon a lack of understanding of the 
situation. Many of the attacks upon combinations 
have had as their aim the suppression of the move- 
ment rather than the elucidation of the subject and 
the utilization of the force. Such attacks, legislative 
or otherwise, while dangerous to the combinations, 
react strongly against the public. 

Trusts in Politics. — The tendency of indus- 
trial corporations to enter the field of legislation and 
politics is dangerous. Unwise legislation against 
industrial combinations, legislation in many in- 
stances enacted in response to ill-advised popular 
clamor, invites and sometimes forces the industrial 
corporation to enter the field of legislative compe- 
tition, and when once in that field the corporation 
learns by experience that it can not only defeat anti- 
corporate measures in the usual way, but can even 
procure pro-corporate legislation. 

Any attempt on the part of industrial organiza- 
tions to enter, voluntarily or defensively, into the 
field of legislation is a tendency which is to be re- 
garded with grave apprehension. 

Speculation by Officers of Trusts. — As to 
speculation by officers of corporations in their own 
securities, conceding, if you please, that a daily and 
public market for industrial securities is a necessity 
for their success as a popular investment, yet if it be 
true that in the private offices of any official of a 



James B. Dill 37 

great combination one finds not only the business 
desk, but also a stock exchange ticker separated from 
the desk by only a wheel chair, desk and ticker be- 
ing equally accessible and, perhaps, equally used by 
the official, one must view this situation with appre- 
hension. That combination which is controlled 
through its management for the purpose of advanc- 
ing or depressing the price of its securities on the 
market, and is run on a principle other than that of 
a strictly commercial enterprise, must ultimately 
land where it belongs— in the gutter. 

So much of the capital of this country has already 
found its way into industrial securities that any 
panic in these securities extends beyond the mere 
industrial investment, and may mean a financial 
panic affecting the business of the whole country. 

The point that electrical energy advanced as a 
public utility only as the public learned by experi- 
ence how to regulate, control, and insulate, will bear 
repetition and renewed application to the industrial 
movement to-day. Utilization and restraint of 
trusts are the essential elements of industrial success, 
but this regulation and control can be had only by 
wise legislation, preceded by an enlightened public 
opinion. Such public opinion and such legislation 
must be founded on a knowledge of the facts. 

PUBLICITY. — Publicity as applied to corporations 
may be characterized as public publicity and private 
publicity. 

Public publicity is not yet universally practised by 
industrial combinations, and legislation has not yet 
been able to fully procure it. Public publicity, 



38 Trusts 

expressed in the form of legislation, will not, I take 
it, be to its fullest extent what certain students of 
economics have denominated public publicity. It 
is an open question as to whether it will be either 
necessary or advisable to open wide to the public all 
of the private details and accounts of corporations, 
large or small. 

It is asserted that private publicity, or informa- 
tion to the stockholders, is not always carried out to 
its fullest extent. It has even been publicly charged 
that knowledge of immediate facts is sometimes con- 
veyed only to an inside circle, said to be less in 
circumference in many cases than the board of di- 
rectors, and not including all the officers of the 
corporation. 

But the time is coming when publicity, properly 
defined and limited, will be an essential element of 
the success of every industrial combination which 
seeks its support from the public. As between com- 
binations themselves, the sound corporation will 
avail itself of the opportunity to demonstrate its 
soundness by public statements, and in such dem- 
onstration force to a lower position its competitor 
who is unwilling and inferentially unable to make 
the same public showing. Public confidence is and 
must be the essential element of the success of any 
industrial combination. Public confidence cannot 
be based upon anything but knowledge of the facts, 
and this knowledge of the facts must come from the 
corporation by way of statements to the public, for 
the accuracy of which statements some one is respon- 
sible. "Let not thy right hand know what thy left 



James B. Dill 39 

hand doeth " is a principle which can be applied to 
charitable organizations only. Applied, either as a 
theory or a fact, to industrial combinations, it is fatal 
to their success. 

This leads to the conclusion that while to-day the 
better corporations are voluntarily practising pub- 
licity, they would favor a statute which secured pub- 
lic publicity from all corporations. This would not 
only benefit the public, steady industrial finances, 
tend to make industrial securities a permanent in- 
vestment for holders, large and small, but would 
also prevent the formation of blind pools, check 
industrial swindles, and avert financial panics. Pub- 
licity is to industrial combinations what street light- 
ing is to municipalities. It promotes legitimate 
business and prevents crime. Publicity must be 
secured by legislation, either national or State, and 
the latter, to be effectual, must be practically uni- 
form among the States. 

State Legislation. — In the field of State legis- 
lation we find one of the gravest dangers surround- 
ing the corporate question, a danger both subjective 
and objective. 

A menace both to the combination and to the 
people is found in the competitive strife among 
States for revenue from corporations. Legislative 
inducements by way of private and public statutes 
to corporate organizations are the order of the day. 
"Protection for domestic corporations, war upon 
foreign corporations," is the legislative theory of 
some States. Just so long as it is possible for a cor- 
porate organization in one State to do that business 



4-o Trusts 

in other States which is forbidden to its own corpor- 
ations, just so long we shall find different States 
offering inducements to capital to incorporate under 
their particular laws. 

To-day we find States giving express permission 
to their own corporations to do in other States what 
such corporations are expressly prohibited from do- 
ing at home. 

The corporation laws of New Jersey provide that 
"it shall be lawful to form a company for the pur- 
pose of constructing, maintaining, and operating 
railroads, telephone, or telegraph lines outside of 
this State,'" but prohibits the formation under the 
general act of such organizations to do business in 
New Jersey. In her new legislation of 1901, New 
York offered a premium to "tramp organizations " 
by providing that corporations organized under New 
York's law, for the purpose of transacting their en- 
tire business without the State of New York, and 
employing their entire capital without the State of 
New York, and none of it in the State of New York, 
should be free from the State tax on the franchise, 
commonly known as the tax on the capital stock. 

The present tendency of some States in State 
legislation respecting industrial corporations is to 
encourage and increase State revenue rather than to- 
ward soundness and integrity of legislation. 

For years the State of New Jersey stood pre-emi- 
nent among the charter-granting States, until, from 
the revenue derived from corporations, she practi- 
cally abolished the necessity for State taxes, and 
contributed large sums for schools, for good roads, 



James B. Dill 41 

and for matters of public use and utility. At the 
beginning of November, 1901, the State of New Jer- 
sey had in its treasury over $2,000,000 as a surplus. 

In 1901, the State of New York, although it had 
for years waged war upon New Jersey's system of 
incorporation, gave way to the contrast between the 
state of its treasury and that of New Jersey. New 
York sought to out-Jersey New Jersey in so-called 
paper liberality to corporations. It amended its 
corporation act upon the theory that the greatest 
paper liberality and freedom from restrictions and 
even private publicity would produce the greatest 
revenue. It made the initial organization easy and 
less expensive, but without lessening the burden of 
the local tax, the most important element of the fixed 
charges against corporations and the great revenue- 
producing factor to New York. The staid old State 
of Connecticut followed suit and opened its doors, 
offering its inducements to corporations, and Maine 
and North Carolina followed the example of New 
York and Connecticut. Delaware and West Vir- 
ginia had already adopted every provision to in- 
crease their revenue as charter-granting States, and 
finally South Dakota comes forward with a proposi- 
tion that it will grant to a corporation everything 
that it will ask, and for a consideration so minute as 
to be scarcely worth mentioning. 

This tendency is not to wisdom of legislation, but 
to absence of restriction, to the granting of powers 
rather than to the maintenance of proper control. 

On the other hand, influenced by the cry against 
monopolies, making no distinction between the 



4 2 Trusts 

combination of to-day and the monopolistic trust of 
yesterday, other commonwealths have filled their 
statute books with discriminations against business 
combinations until it is almost impracticable for 
them to do business within such States. 

National Legislation.— State legislation is 
each year growing more divergent, and we can look 
in that direction with no assurance of any uniformity 
of procedure and regulation of corporations. The 
question is national in extent and breadth. It can 
be dealt with only by legislation equally broad, — 
that is, national legislation. It is suggested that 
national legislation would be unconstitutional. The 
Supreme Court of the United States, however, 
found its way out of the difficulty, when suggested, 
in the case of the National Banking Act. It might 
be said in the present case that the public welfare at 
present more urgently requires a National Corpora- 
tion Act than years ago it required a National 
Banking Act. 

Trusts not Monopolies.— I do not wish to be 
misunderstood as to the character of the industrial 
movement of to-day. It is of the highest order, is 
progressing in the right direction, and is an uplift- 
ing force. It has been productive of great good to 
this country. It is a direct contributing factor to 
the commercial supremacy of the United States. 

The form of a strictly monopolistic trust, aiming 
to suppress competition, so often described by the 
theorist and the scholar, does not to-day exist to 
any extent. Theorists, social reformers, and some 
students of economics have argued against the char- 



James B. Dill 43 

acter of the industrial movement of to-day. They 
failed to recognize the fact that the " octopus," the 
"monopolistic trust," the organization "destroying 
competition," "annihilating individualism," existed 
largely as a mental spectre. To the minds of some 
such, the suppression of competition in America 
seems to be the chief aim of the combinations, while 
in truth and in fact the destruction of competition 
in America is impossible. They do not publicly 
recognize and admit what is the fact, that the ma- 
jority of the so-called trust evils which they have 
portrayed have been largely in the nature of appre- 
hensions, and that the objections, practical and 
theoretical, subjective and objective, to and of the 
industrial movement, have largely settled and cured 
themselves before legislation was necessary. 

There are dangerous tendencies, as has been 
frankly admitted, but they are ills which are natural 
to humankind and to human organization, not to 
be cured by hasty legislation and in the twinkling 
of an eye, not to be overcome by vituperation and 
abuse, but rather to be minimized, and perhaps ulti- 
mately eliminated, by wise, conservative examina- 
tion and decision upon the question as a whole, 
based upon practical experience. 



TRUSTS 

The Trust Question 
by anson phelps stokes 

BISHOP POTTER'S scheme for a newspaper 
discussion of the labor question is nobly con- 
ceived, and much good must result. By choosing a 
popular medium, instead of some dignified church 
organ, he truly aims to follow the great Bishop and 
Reformer of whom it was said, "The common 
people heard Him gladly." 

It is useful to consider in popular debate some of 
the elements which must enter into any full under- 
standing of this question. But the subject is of too 
far-reaching scope and importance to be fully de- 
veloped in this article. A thorough treatise on the 
best relations of labor and capital would require, of 
the greatest intellect, many years of special and de- 
voted study. All that I am prepared to attempt is 
to point out a few of the facts that must be consid- 
ered, and to make a few practical suggestions. Some 
of these have no doubt been expressed before in 
some form. 

Arbitration. — Absolute enforced arbitration 
cannot be relied on to settle all questions of wages, 

44 



Anson Phelps Stokes 45 

for it might make working men slaves or ruin employ- 
ers. But the experience of New Zealand has shown 
that much harmony between employers and em- 
ployed can be produced by a public Board of Arbi- 
trators, having authority to examine books and 
papers, etc., to ascertain the real conditions of the 
trade and what wages the business can afford to 
pay; and with authority to exact a fixed fine from 
the manufacturer or the trade union, whichever 
party the arbitrators may find to be wrong in de- 
manding or refusing a change in wages. 

LEGISLATION. — Combination and organization in- 
crease efficiency and economy in manufacture, in 
transportation, etc. If all the plants of a great indus- 
try in one country be combined under the control of 
one capable man, that combination will have an im- 
mense advantage in competing with manufacturers 
not so organized in other countries. The great 
combination can also, if it chooses, reduce the price 
of its product to its own countrymen; and, if it 
chooses, it can increase the wages and reduce the 
hours of labor. But a great trust is not likely to 
choose to look out for the interests of the community. 
So it is for the people to see to it that their represen- 
tatives in the Legislatures secure for them the nec- 
essary compensations and safeguards for all powers 
and privileges granted to corporations. 

Publicity. — The great combinations and all stock 
companies exist only by permission of statute laws, 
which, if justly drawn or amended, would secure to 
the people fair compensation and efficient safeguards. 
Corporations are exempt from death taxes and receive 



46 Trusts 

certain advantages from the State, and ought to pay 
larger annual taxes than individuals. Their books 
ought to be open to public examination to protect 
the community from conspiracy or other acts against 
public interest. Corporations should be absolutely 
prohibited from meddling at all in politics and from 
contributing any funds to influence legislation. An 
officer of a corporation making any such contribu- 
tion ought to be subject to severe punishment, and 
made incapable of holding office, and any attempt 
to conceal such contribution under the guise of 
" legal expenses " or otherwise ought to involve ad- 
ditional fines and penalties. 

Secret Profits. — Corporations being creatures 
of the Legislature, their directors and trustees and 
other officers must be considered as quasi-public 
officials. Any attempt of a trustee of a corporation 
or trust to make a secret profit out of his position as 
such trustee should be punished as if he were a 
trustee under a will. Until the smallest stock- 
holder enjoys the same right as the largest to know 
everything he wants to know about the affairs of 
a corporation, and until directors and other trus- 
tees are effectively prohibited by law from specu- 
lating in the stocks of their companies, and from 
making secret profits out of their positions or 
their knowledge of the operations of the corpora- 
tions committed to their care, the workingman can- 
not with safety, or on equal terms, invest in the 
stocks of industrial or transportation companies ; and 
this most important kind of community of interest 
between capital and labor cannot be effected. 



Anson Phelps Stokes 47 

Any serious attempt by reformers to take from 
directors and other trustees such secret profits, and 
to confiscate these for public uses, would, to use an 
old metaphor, raise a whirlwind in Wall Street that 
would unroof temples of trade and blow down the 
steeple of Trinity Church. Such a reform move- 
ment, if successful, would do away with all difficul- 
ties about tax rates and go far toward solving the 
labor question. If these secret profits could be re- 
covered, or, better, made impossible, there would 
be fewer speculative directors, fewer unjust man- 
agers and superintendents, and fewer paid labor agi- 
tators, fewer mills arbitrarily closed, fewer sudden 
reductions of wages, fewer strikes, and more work- 
ing men would be found investing their savings in 
the stocks of the companies employing them. 

Corporation Magnates.— It is impossible that 
in a free country one man may be permitted to say, 
in any great national industry, that wages shall be 
fixed by him, that he shall determine what church 
or labor union any of his employees shall or shall 
not belong to, and that his only terms are uncondi- 
tional surrender. 

It is deplorable that large bodies of working men 
should be drawn into ill-advised strikes by leaders 
who deal in bombastic boasts and threats, and in 
other ways show want of mental balance and force. 
Let us hope that a strong and unselfish people's 
champion will be found to do for labor what Charles 
James Fox did for liberty. 

Let us believe that the wonderful changes going 
on in the industrial world, some of the results of 



48 Trusts 

which are beyond our comprehension, will be so 
over-ruled by Providence as to lead to a more just 
order of things and the greatest good of the greatest 
number. Let us all strive to do what we can to 
promote justice and fair dealing, and teach our chil- 
dren, by precept and example, to work unselfishly 
and fearlessly for the public good. 

Reformers must expect to be despised and hated 
by those who profit by existing abuses. 

The power wielded by the present order of things 
in Wall Street is unprecedented. A clever woman 
lately said that any business man in society in New 
York who is not connected with the Stock Exchange 
is bound to explain why. The influence of a few 
great corporation magnates in society, in the Legis- 
latures and courts and official circles, in seats of 
learning, in the press, and in the Church is not yet 
fully understood. 

Responsibility of Working Men.— But it 
would not be just to place all the blame on promi- 
nent individuals, who may, perhaps, claim that 
they are only playing according to the rules of the 
game. Working men, being a majority of the voters, 
are very largely responsible for the present unjust 
conditions. Christian philosophy, combined with 
just penal laws, can curb the exorbitant and danger- 
ous power of the few. The great body of working 
men in this country can be free from industrial op- 
pression when they cease selling their votes to 
political bosses. 

I do not mean that direct payment of money for 
votes is general, but, as has often been pointed out, 



Anson Phelps Stokes 49 

that votes are very commonly influenced by consid- 
erations regarding employment, or by promises of 
such unjust gains as the tariff laws deceitfully hold 
forth. I am informed regarding a community, where 
public labor would give regular employment to not 
more than fifty men, that about three hundred are 
placed on the labor list by party bosses and given 
temporary employment on public work during some 
weeks or months throughout the year, and that 
these three hundred men vote at the dictation of the 
party bosses, and control the affairs of that com- 
munity. This is a fair sample of what is going on 
in very many places in the United States. 

State socialism is not generally practicable, but 
great industries can be controlled by the Govern- 
ment to this extent, at least, that those to whom per- 
mission is granted to combine in corporations for 
manufacturing and railway purposes, etc., and to act 
as trustees, directors, and other officers, shall not be 
permitted to make secret personal profits out of 
these positions. These secret profits from combina- 
tions and speculations are in many cases larger than 
all the wages paid by some of these corporations 
during a long period. If they were prevented the 
companies would have much less interest to pay on 
bonds and watered stocks, and could afford to pay 
higher wages. 

The present discontent comes largely from the 
evident injustice in the division of profits between 
corporation magnates and their workmen. 



TRUSTS 

Benefits of Trusts 1 
by william richmond peters 

IN view of the public interest in manufacturing in- 
dustrial combinations, or trusts, and the wide- 
spread demand for restrictive State and national 
legislation, I offer the following remarks in the en- 
deavor to show, from a business man's practical 
standpoint, how the real interests of the public at 
large are affected and whether such legislation is 
desirable. 

In such a brief article very much is left unsaid that 
might strengthen the poskion taken herein. 

The principal questions to ask about the new sys- 
tem of combinations of factories are: 

First. — Will cost of production be cheaper than 
under the old system of individual manufacturers? 

Second. — Will expense of distribution be less? 

Third. — What will be the effect on labor and 
wages? 

Fourth. — What will be the effect on prices? 

An affirmative answer is usually conceded to the 

1 The original of this article appeared as a letter in the New York 
Times, August 2, 1899. 



William Richmond Peters 5 1 

first two questions. Taking them, however, in their 
order: 

First. — Cost of production. The management of 
each new combination has the advantage at the out- 
set of comparing manufacturing costs in a number of 
different factories and adopting for all the most ad- 
vantageous methods. In addition to this, the con- 
centration of manufacturing, ample capital, ability 
to buy cheaper, lessened cost per unit of superin- 
tendence, and many other causes which enable the 
larger manufacturer to produce cheaper than the 
smaller manufacturer, certainly enable these enor- 
mous combinations to work at lower cost than the av- 
erage manufacturer, and generally at as low, or 
lower, cost than large single factories. 

Second. — As to distribution. Under the new sys- 
tem, producer and consumer are brought closer to- 
gether. Services of salesmen are, to a considerable 
extent, dispensed with, cross freights, often a very 
important item, are saved, and altogether the eco- 
nomical balance is undoubtedly in favor of the new 
system. 

Third. — Effect on wages and labor. Recent ad- 
vances in wages have been due to commercial ac- 
tivity, and not to the trusts, and the ultimate effect 
is a matter of opinion. 

The new system is likely to employ the same 
number of workmen at equally high wages, and their 
employment will probably be more stable, as there 
is less liability of corporate insolvency, or of over- 
production, followed by idleness. I think labor will 
fare better, and can make better terms under large 



52 Trusts 

corporations and broad, trained men, than under the 
single factory system, where most manufacturers 
think they are forced by competition to pay as little 
as possible. The relations of capital and labor are 
being better understood and settled, and are to-day 
usually settled more satisfactorily for the men by 
large employers than small ones. 

On the other hand, the new system reduces the 
number of salesmen, and to a less extent office 
clerks, but both these bear a trifling relation in num- 
bers to manual laborers, and their loss of employ- 
ment occurs during a period of prosperity where 
most of those thrown out can soon find new 
positions. 

Fourth, — 'Effect on prices. The past does not 
supply statistics. Standard Oil and Sugar operated 
under different conditions. Commercial activity 
has brought advancing prices, articles not controlled 
by trusts — such as tin, copper, and iron — rising 
equally with trust articles, and it is impossible to 
say what, if any, part in the general advance has 
been due to trusts. 

Trusts are subject to the same natural laws of 
trade as individual manufacturers, and their greatest 
danger — excluding bad management — lies in possi- 
ble competition. Good business management and 
self-interest require them to maintain prices at such 
a moderate level as will not invite competition and 
at a lower level than has ruled hitherto. It is rea- 
sonable to conclude that the ruling price of nearly 
any manufactured article for a term of years has 
been such as to leave the average manufacturer a 



William Richmond Peters 53 

profit, and that if the trusts should fix prices at fig- 
ures leaving a profit for the average manufacturer 
they would simply be overwhelmed with competi- 
tion. They absolutely must fix prices lower, and in 
doing so they share with the public the economies 
due to their operation. 

These remarks apply to trusts in general ; there 
are exceptions, such as those enjoying a monopoly 
through ownership of patents, control of raw ma- 
terial, and also through excessive tariff protection. 
Business interests are best left as free and unfettered 
as possible, and, speaking broadly, they are much 
better regulated by the natural laws of trade, to 
which they are subject, than by legislation. 

To sum up, if my conclusions are correct, and I 
think they will appear reasonable to the fair minded, 
the well-managed trust can produce cheaper, and 
market its product more economically, and will, pre- 
sumably, pay as good wages and sell its manufac- 
tured products cheaper than heretofore. Under 
these conditions they are correct economically and 
an advantage to the country and its people. Much 
stress is laid by opponents of trusts upon the sup- 
pression of individual effort, which, I think, deserves 
little attention, and also upon the suppression of 
competition, which, however, is not suppressed, but 
dormant, and exists ready to assert itself under 
proper conditions. A great deal of competition 
which is wasteful and useless is set aside. 

One very important consideration favoring our 
trusts is their relation to the export trade and for- 
eign competition, and their probable ability to pay 



54 Trusts 

American wages and compete with foreign manu- 
facturers employing cheaper labor. 

Instead of adopting restrictive legislation to con- 
trol trusts it would appear ordinary common sense 
to await further developments and give them a 
chance to adjust themselves to their surroundings 
and demonstrate their usefulness or otherwise. 

Note. — When this article was written the country had become 
alarmed at the enormous scale upon which the consolidation of indus- 
trial corporations and the formation of so-called trusts was proceeding 
and there was a general demand for restrictive legislation, such de- 
mand being generally for legislation that would prevent the organ- 
ization or legal operation of these industrial corporations, and even 
the milder proposals were designed to discriminate against the 
operation of the combinations in favor of single companies. It was 
under such conditions and against such legislation that this article 
was written. Since then, the new economic conditions which these 
great industrial corporations represent have been generally ac- 
cepted, and through much discussion in magazines and newspapers, 
the report of the Industrial Commission, and other writings, 
scientific and otherwise, their operation has become so well under- 
stood that legislation, if any be necessary, would be on moderate 
and just lines, and could now be safely undertaken. — W. R. P. 



LABOR UNIONS 
Benefits of Labor Unions 
by james bronson reynolds 

1 DESIRE to offer a brief statement, drawn from 
my personal experience and observation, of 
what I regard as the chief benefits of trade-unions, 
both to their members and to employers. 

Benefits to Employed. — I would specify three 
classes of benefits which unions give to their mem- 
bers. The first is the immediate, material benefit 
for which the union is organized, namely, a fair 
working day and as high wages as possible. If you 
find a trade with short hours and good wages you 
may be sure that it is one whose workers have been 
organized into a union. If the hours are long and 
the wages small, you may safely infer that the trade 
is either unorganized or weakly organized. The 
only exceptions are a few very highly skilled trades 
where organization may not be necessary to secure 
a monopoly of labor. 

Those who call themselves the advocates of non- 
union labor should remember that the union secures 
the hours of labor and the standard of wages by 
which the non-union man is benefited equally with 

55 



56 Labor Unions 

the union man. I know no means by which reason- 
able hours and a fair rate of wages can be secured 
and maintained in a trade except by organization, 
and I regard the realization of the value of organi- 
zation in any trade as a fair test of the intelligence 
of the men engaged in it. Organization for the 
protection of common interests and common rights 
is a product of civilization. If unions are sometimes 
narrow or arbitrary the remedy is not the abolish- 
ment of the union, any more than anarchy is the 
remedy for bad government. The remedy for bad 
government is good government, and the remedy 
for bad unions is good unions. In any case organi- 
zation is the road to improvement and progress for 
the wage-earner. 

Further material benefits from trade-unions are 
found in the efforts of the unions to secure the 
safety of their members in the use of dangerous ma- 
chinery, in the maintenance of good sanitary condi- 
tions under which the work shall be performed, in 
the granting of out-of-work, sickness, and death 
benefits. A labor union is also an employment 
bureau, and its officers spend no little part of their 
time in securing work for members out of work. 

The second benefit of a trade-union to its mem- 
bers is that the union seeks to maintain permanent 
employment. A well-organized union is always 
opposed to strikes except as a last resort. The 
strength of a union can be judged by the frequency 
of strikes in the trade. Labor leaders, as a class, 
are opposed to strikes, and prevent many labor diffi- 
culties of which employers are not aware, and for 



James Bronson Reynolds 57 

which the leaders receive no credit. This statement 
may be a surprise to some and may be denied by the 
enemies of trade-unions, but it is nevertheless true. 
As union officers are not connected with the shop in 
which difficulties arise, they are usually free from its 
prejudices and its irritations. There have been 
many instances where they have kept men at work, 
where "hotheads " would have caused a strike and 
would have involved their members in loss. Em- 
ployers who indignantly resent what they call the 
intrusion of outsiders in the management of their 
own affairs would do well to consider this statement. 
This service of labor leaders is neither known nor 
appreciated as it deserves to be. The unreasonable 
demands and overbearing manner of a few are taken 
as characteristic of the class. 

The third benefit of a trade-union to its members 
is the moral benefit. Unions in the technical trades 
demand tests of efficiency from their members. 
Some also demand the maintenance of a certain 
standard of technical efficiency, and many scrutinize 
moral character. The officers of a union who find a 
member repeatedly out of work and constantly com- 
ing to them for another job are sure to advise him 
to do better work and warn him against the results 
of dissipation. Hence unionism, though not en- 
couraging competition between the members, does 
encourage good character and good work. 

Benefits to Employers.— The benefits of a 
trade-union to the employers have been recognized 
by a few, grudgingly admitted by some, and 
doubted by many. But I am convinced that it is as 



58 Labor Unions 

certainly to the advantage of the employer to deal 
with a union, rather than with unorganized bodies 
of working men, as it is to the advantage of the men 
to belong to the union. The first benefit to the em- 
ployer who wishes to learn the real cause of his diffi- 
culties with his men is that he can deal through the 
union with their own chosen representatives, who, 
as a rule, are best qualified to speak in their behalf. 
Not being dependent upon the employer, the lead- 
ers are able to speak frankly and freely, and the root 
of the difficulty can be reached more quickly through 
them than through the workers who constantly fear 
that their complaints may cause the loss of their 
jobs. Second, employers often indignantly declare 
that they are always willing to meet their own men, 
but do not admit the right of outsiders to "interfere 
in their business." Without discussing the eco- 
nomic questions involved in that proposition, but 
considering the case merely from the employer's 
point of view, I believe the prejudice is short- 
sighted. The employer needs to learn the real 
cause of the difficulty in his shop from those best 
able to express it and who will be fiee from personal 
prejudice and local bias. The labor leader knows 
how to handle his own men, is not deceived by their 
attempt to give an incorrect statement of the case, 
quickly sifts the evidence, and, because of his ex- 
perience, is an expert representative of the laborer's 
point of view. If the employer is willing to meet 
his men fairly, he cannot find any one so well quali- 
fied to help him settle the difficulty justly to both 
sides as the accredited leader of an organization. 



James Bronson Reynolds 59 

Third, the employer is immensely benefited by the 
conservatism of the experienced labor leader. Un- 
organized bodies of men are much more likely to 
strike hastily than if directed by experienced leaders. 
Of course there are leaders who involve their unions 
in unnecessary strikes, make negotiation with the 
employers difficult, exercise a bad influence over the 
men, and are generally unworthy of respect or con- 
fidence. But the true character of such men is sure 
in time to be discovered. A union will not keep a 
leader who does not * 'hit it off " with the employers, 
and after pretty regular attendance for a number of 
years at the Central Federated Union of New York, 
I am convinced that no men undergo more frank 
and searching criticism than labor leaders. My 
opinion is that while some unworthy and dishonest 
leaders are unwisely trusted by their organizations, 
in the majority of cases it would be better for the 
men if they more thoroughly trusted their own 
chosen leaders. Distrust of their leaders is the 
greatest weakness of labor unions. While a few so- 
called "walking delegates" may be untrustworthy 
the majority of them are reliable and hardworking, 
having less leisure than the men whom they repre- 
sent. The labor leader who works sixteen hours a 
day to secure an eight-hour day for his men is not 
consistent with his principles, but he is entitled to 
the respect of his organization. 

Need of Industrial Arbitrator.— Finally, I 
desire to call attention to one important defect in 
existing relations between employer and employee. 
In former days, when there were no large employers, 



60 Labor Unions 

the small employer constantly associated with 
his men, worked at the same bench, and often ate 
at the same table. At the present time, with the 
continually increasing centralization and develop- 
ment of great industries, the employer may not 
know any of his men. The employer's manager 
may also not know any of his men, and it is only 
the manager's general foreman who will come in 
touch with them. Hence, it is frequently only the 
deputy of the employer's deputy who maintains 
personal relations with the workers. When such a 
situation is created it is not surprising that misun- 
derstandings and mutual distrust arise. When such 
misunderstandings have arisen, if the employer sends 
for his general foreman and for representatives of his 
men, the general foreman is immediately on the de- 
fensive, because the difficulty can only be regarded 
as a criticism of his administration. The men are 
shrewd enough to be aware that, while the employer 
may be truthful in stating that he is anxious to 
remedy any real grievances in his factory, if the im- 
mediate wrongs are righted, they will be again at 
the mercy of the general foreman. In a few months 
possibly some men are likely to be dropped from the 
pay-roll as unsatisfactory. The employer will have 
forgotten that these were the men who formerly 
stated their troubles to him, but the men will not 
have forgotten that fact and one such lesson will be 
sufficient. I therefore believe that it would be a 
great gain, financially and otherwise, to large em- 
ployers to have as a part of their staff a permanent 
industrial arbitrator. This representative should be 



James Bronson Reynolds 61 

independent of the manager and general foreman, 
and directly responsible to the employer. It should 
be his business to be thoroughly posted regarding the 
conditions of the working men in their homes as well 
as in their shops, acquainted with their leaders, and 
also intelligently acquainted with the general admin- 
istration of the work from the employer's point of 
view. Such a representative must not be a cheap 
man. He must be well paid, and the dignity of his 
position clearly recognized. He must be a man with 
a sound grasp of the complex conditions of social 
life and of their relation to industrial difficulties. 
He must have a clear head and be able to grasp a 
difficult situation and offer a practical remedy. I 
am confident that thousands and even millions of 
dollars have been lost in labor conflicts, when the 
whole difficulty was due to the ignorance of the em- 
ployer regarding the exact situation, and to the hos- 
tility of the men towards the employer because of 
an overbearing manager or general foreman who did 
not represent the real attitude of the employer. 
The industrial arbitrator is, therefore, in my opin- 
ion, the factor most needed at present for the pro- 
motion of industrial peace. 



LABOR UNIONS 

Labor Unions and Strikes 

by samuel gompers 

THERE is no necessity to worry about how labor 
and capital can be reconciled, for they are one 
and the same. How the laborers and the capitalists 
can be reconciled is entirely within the scope of 
proper inquiry; and to this all students of econom- 
ics and devotees to the social welfare may well give 
their best thought and attention. And this inquiry 
may lead to the conclusion that despite the clamor 
which we hear and the conflicts which occasionally 
occur, there is a constant trend toward agreement 
between laborers and capitalists, employed and 
employer, for the uninterrupted production and 
distribution of wealth, and that, too, with ethical 
consideration for the common interests of all the 
people. 

Strikes. — No body of men deplores strikes more 
than do the organized workers. One of their chief 
aims is to endeavor to reduce the number, if not 
entirely to obliterate strikes; but thinking men have 
no sympathy with the unqualified condemnation 
with which the dilettante in society, the professori- 

62 



Samuel Gompers 63 

ate, the open and covert enemies of the workers, 
denounce them. 

A strike or lockout is a disagreement between the 
buyer and seller of labor power in order to arrive 
at what each or both may determine to be a more 
rational and equitable condition upon which pro- 
duction and distribution shall proceed. There has 
never yet been full harmony between the buyers and 
sellers of anything in this world. When a strike or 
lockout occurs, wages and production are not de- 
stroyed ; they are deferred. Since the era of modern 
industry, there have always been periods or seasons 
of great activity and industry, followed by periods 
or seasons of stagnation and idleness. Strikes sim- 
ply defer the production from one season to another. 
Production in the aggregate of an entire year has 
never yet been diminished by a strike. Organized 
workers seek to reduce strikes by being the better 
prepared for them. 

Strikes of unorganized or newly organized work- 
ers always arouse the greatest bitterness on both 
sides. The employer who has been master of all 
he surveys looks upon his employees as servile ser- 
vants, the slightest request or protest from whom is 
taken to be an attack upon his prerogative and privi- 
lege. To him it is dictation, which he resents in 
the most autocratic fashion. The unorganized or 
newly organized workers have always looked upon 
themselves as entirely impotent, and therefore una- 
ble to secure any redress for any wrongs which may 
have been inflicted upon them. Their comparatively 
low condition and their sufferings have made them 



64 Labor Unions 

desperate; and in their unity a new-found power 
dawns upon them, the situation is completely 
changed, and they regard their employers as power- 
less to resist any demand, and themselves as al- 
mighty. After the first contest, both have learned 
a lesson ; and if the workers maintain their organiza- 
tion, each finds that neither side possesses all the 
power nor all the responsibility. They have mutual 
respect for each other, and enter into mutual agree- 
ments. 

The best organized workers, those who are better 
prepared to enter into strikes or to resist lockouts, 
are those who have least occasion to engage in them ; 
and yet they are the greater beneficiaries from mod- 
ern civilization in the form of higher wages, shorter 
hours of daily labor, Sunday rest. They attain a 
higher plane of morality, economic, political, and 
social independence. 

The thousands of agreements reached, the many 
more thousands of strikes averted through organiza- 
tion, are lost sight of by the. sophists and superficial 
observers, and strikes are regarded as the sum total, 
the Alpha and Omega of the labor movement, 
when, as a matter of fact, as already indicated, 
strikes are a few of the failures to agree on terms 
upon which industry shall be continued. 

While some may assert that the strike is a relic of 
barbarism, I answer that the strike is the most 
highly civilized method which the workers, the 
wealth producers, have yet devised to protest 
against wrong and injustice, and to demand the en- 
forcement of the right. The strike compels more 



Samuel Gompers 65 

attention to and study into economic and social 
wrongs than all the essays that have been written. 
It establishes better relations between the contend- 
ing parties than have theretofore existed, reconciles 
laborers and capitalists more effectually, and speeds 
the machinery for production to a greater extent, 
gives an impetus to progress, and increases power. 

If one were to take seriously the bitter attacks 
which are made upon strikes and trade-unions, we 
would imagine ourselves in the midst of barbarism, 
and the United States the last in the procession of 
the industrial nations of the world. There exist or- 
ganizations in China, bound by oath and supersti- 
tion; but there is no organized labor movement 
there. Centuries of hunger have stultified the race, 
not satisfied it. It has curbed and compressed them, 
not expanded or broadened them. Servility and 
physical cowardice are their attributes. China is "a 
country without strikes"; and so long as our pres- 
ent industrial system shall last, a country without 
strikes must of necessity be like China, or tend to- 
ward that goal. 

Language fails me to express how earnest are the 
organized workers in their desire to avoid and to re- 
duce the number of strikes; but as one associated 
with the labor movement of America and who has 
given more than thirty years of life to the study of 
economics, the history of the struggles of the work- 
ers of the world, who has participated with them in 
their glories as well as their defeats, I am happy in 
being in mental company with Abraham Lincoln 
when he said: "Thank God, we have a system of 



66 Labor Unions 

labor where there can be a strike. Whatever the 
pressure, there is a point where the working man 
may stop." I trust that the day will never come 
when the workers, the wealth producers of our 
country and our time, will surrender their right to 
strike. 

The attacks on labor organizations and strikes are 
repetitions of the old laissez faire cry of ''Let well 
enough alone," which is as old as the hills, and just 
as easily susceptible to an advance step or a progres- 
sive thought. The same cry went up when women 
in England, half naked, worked on all fours in the 
mines, and seldom left the mines except to give 
birth to a child and to be returned to the clay from 
whence they came. In the early part of this century, 
when the organized workers made the first attempt 
to secure relief from or a remedy for this brutal 
condition of affairs, the same cry went up from the 
faddists, theorists, and effeminate men. Then, as 
now, even some of the dignitaries of the church held 
up their hands in holy horror, and denounced the 
attempt of the labor organizations to secure Parlia- 
mentary relief, and declared that it was an attempt 
against the Divine Will to prevent these women 
from earning their bread. The quickened conscience 
of England's law-makers was aroused by the mighty 
protest of the toiling masses of that country, and the 
barbarous practice was abolished. 

In our own country, the attempt made years ago 
to save the women and children from the mines and 
mills and factories and workshops was met with 
the same hue and cry; and now we are met with the 



Samuel Gompers 67 

same protest, and from the same source, when we 
are attempting to save the children of the Southern 
States from the brutal greed and avarice of dividend 
maniacs, not only those who are resident in the 
South, but and more particularly Northern and 
Eastern holders of securities in the Southern mills. 
The same crass ignorance and vile avarice prompted 
the Alabama Legislature six years ago to repeal the 
law limiting the labor of children under twelve years 
of age to sixty hours a week. 

The strike of the textile workers of Danville some 
months ago for the maintenance of the ten-hour-a- 
day law of Virginia was resisted by all the powers 
that could be brought against the men and women 
there. When, in the language of that departed 
statesman, "all the resources of civilization " were 
brought into play, the finer art of slow and cruel 
starvation was used as the means of defeating those 
who stood for right and justice and humanity. 

In this world of ours those who do net make 
themselves heard have no grievance to redress. 
Those who are not willing to bear burdens and even 
temporary sacrifices in striking for their rights may 
be given a passing word of sympathy; books and 
essays may be written upon social inequalities and 
the awful condition of the slums; but they are usu- 
ally "passed by on the other side," and left in their 
squalor and misery. The workers or the people of a 
nation who, knowing their rights, have the courage, 
the fortitude, and the willingness to assert and de- 
fend them, are always the most respected among the 
peoples on the face of the earth. 



68 Labor Unions 

For more than twenty-five years the miners in the 
anthracite coal regions were being degraded. Who 
gave them attention but the organized workers? 
When at last, through the efforts of organized labor, 
the miners were aroused from their lethargy, deter- 
mined to strike, and did strike, despite the popular 
notion that they had lost all courage and would not 
strike, 170,000 of them gave notice to the world that 
if coal was to be mined the men were entitled to at 
least a living wage as a condition precedent. Uni- 
versal sympathy was aroused in their favor, and it 
resulted in a concession and a victory which all the 
world agrees made for the social and moral uplifting 
of the entire communities in which the miners 
lived. 

Labor Unions. — Organized labor stands for 

(1) Organization; 

(2) Conciliation; 

(3) Arbitration. 

We know that without organization, conciliation 
and arbitration are a delusion and a snare. 

The combination of the employers, the wealth pos- 
sesses of America, has progressed at a very rapid 
rate. The workers have no fear because of these 
combinations. They are realizing that, in order to 
protect and promote their interests to-day, and to 
safeguard their liberty and freedom for the future, 
it is essential for them to unite and federate. And 
out of the two united forces there is a constantly 
growing tendency toward mutual agreement, these 
agreements lasting for a stated period during which 
industrial disturbances are avoided, while rep- 



Samuel Gompers 69 

resentatives of both sides engage in adjusting the 
differences arising from the constant transition in 
machinery and methods of production, when they 
meet annually or biennially to discuss the condi- 
tions upon which industrial peace may be continued 
for a like period. 

The workers are sometimes accused of unwilling- 
ness to concede. To this we answer that so far as 
it is possible the workers ought not to concede; in 
fact, they have so little that they have exceedingly 
little to concede. The cry of the toilers is for, More ! 
The organized movement of the workers is to obtain 
more of the advantages which result not only from 
their labor, but from the combined genius of the 
past and present. s.^^ 

The movement of labor began with those who, 
through the rudest form of association, pledged to 
each other the effort to lighten their burdens, miti- 
gate their woes, and resist the common oppressor. 
It has moved along with the increased aspirations, 
wants, and demands of the most intelligent among 
us. 

None will dispute that the trade-unions represent 
the most moral and intelligent of the working class, 
and that they represent the highest practical hopes, 
and aim to achieve them in the most reasonable and 
civilized manner. 

All really educated and honest men admit that the 
thorough organization of the wage-workers tends to 
render employment and the means of subsistence 
less precarious, and secures a larger share of the 
fruits of their toil. It reduces the hours of labor, 



;o Labor Unions 

and gives more time for physical and mental culture 
and more leisure for the attainment of the highest 
attributes and noblest aspirations. 

Organized labor helps to reduce class, race, creed, 
and political prejudices. It aids and supports its 
fellow-workers morally and financially. It raises 
wages and lowers usury. It fosters education and 
uproots ignorance; increases independence and de- 
creases dependence. It develops manhood and balks 
tyranny. It shortens hours of toil and lengthens 
life. It lightens and brightens man. It establishes 
fraternity and discourages blind selfishness. It 
makes manhood more independent, womanhood 
more beautiful and healthful, and childhood more 
hopeful and bright. It cheers the home, and tends 
to make the world better. 

Unions of labor endow the workers with individ- 
ual dignity and individual freedom. The unions 
prescribe a minimum living wage; not a maximum 
wage. They insist upon a living rate, and never 
hinder an employer from rewarding superior skill or 
merit, the charge of labor's enemies to the contrary 
notwithstanding. 

American labor has been clearly demonstrated to 
be the cheapest in the world, in spite of the higher 
wages prevailing here; the cheapest because the 
most efficient, intelligent, alert, conscientious, and 
productive. American manufacturers have con- 
quered the markets of the world, and have defeated 
their competitors on the latter's own ground; and 
yet a sycophantic press would have the world be- 
lieve that the most skilled, the most progressive 



Samuel Gompers 71 

American workmen, those organized into unions, 
have sacrificed their dignity and individuality, and 
levelled themselves down to the least capable. 
Never was America's foreign trade so stupendous 
as now, and never was labor better organized or 
more alive to its interests than in our day. 

Where are the evidences or manifestations then, 
of harm done by organized labor? Production has 
more than kept pace with population, or the grow- 
ing demands at home and abroad. 

The toilers will contend for full and unqualified 
recognition of all their rights. They will win in the 
future as they have won in the past. Nor will they 
transgress the limits of legal and strictly industrial 
warfare. There has not been a school of political econ- 
omy in any era of our industrial and commercial life 
that has advanced the wage-earners one jot in their 
material interests. It has been the persistent plod- 
ding and sacrifices of the organized labor movement 
which have secured for the workers a general discus- 
sion of their rights and their wrongs, and have given 
the keynote and proven the open sesame to the stu- 
dents in all walks of life. These have opened up a 
vista of knowledge to men, and mentally disen- 
thralled all. To-day every proposition of a politi- 
cal, social, or moral character must have its sound 
basis in economic causes and their results to the 
toilers. In this era of industrial development and 
concentration, each individual worker acting for 
himself is accorded no rights or consideration. His 
share in the result of the product of his toil depends 
upon the generosity of the average employer, a basis 



7 2 Labor Unions 

so preposterous that no reasonable thinking man 
can defend it. 

Compulsory Arbitration. — Some, well-mean- 
ing, and others not quite so friendly disposed, 
have urged upon the workers compulsory arbitra- 
tion 1 as a means to end industrial strife. The 
most pronounced advocate of that system in Amer- 
ica is one who, though well-intentioned, has in turn 
advocated as many different remedies for our so- 
cial ills as the human mind has evolved, and has 
written successively to the utter confusion of his 
previously proclaimed theories. Another, who ad- 
vocates compulsory arbitration for New Zealand and 
is loud in its praises, hesitates in his advocacy of its 
acceptance in the United States; while the author 
of the law in New Zealand recently declared that it 
must be either curbed, modified, or repealed. 

It may not be known to the advocates of compul- 
sory arbitration that in the fifteenth century there 
was a species of compulsory arbitration in vogue in 
Great Britain, where the courts determined the 
wages and conditions of employment. To the stu- 
dent of history it is an open book that the workers 
of Great Britain in that time were practically en- 
slaved ; that industry was hampered, and that only 
through violent revolution was a change brought 
about by which the laborers were permitted to quit 
their employment at will; and from that revolution 
by slow and painful processes the industrial progress 
of Great Britain has developed. 

1 The subject of compulsory arbitration is treated more fully by 
Mr. Gompers in an article printed in the appendix. 



Samuel Gompers 73 

- / Compulsory arbitration is the very antithesis of 
^freedom and order and progress. On the one hand, 
it would mean confiscation of property ; on the other, 
it involves slavery; and the enforcement of either 
or both of these is the beginning of the end, the 
death-knell of the industrial and commercial su- 
periority of America. \ 

No one pretends that our present industrial life is 
an ideal one, but that it is the best that has yet been 
evolved in the history of the world no sane man will 
deny. The organized labor movement, the indus- 
trial and commercial advancement to which we have 
attained, even by our crude methods, ought to be a 
sufficient answer to those who imagine they can cure 
all the ills of mankind in the twinkling of an eye by 
a patent process or by the enactment of a law. The 
point of success and superiority which we have 
reached, together with the bungling which the poli- 
ticians, misnamed statesmen, have made of any 
attempt to deal with industrial affairs, ought to be 
a sufficient warrant to all earnest, right-thinking 
Americans to insist that at least the industrial affairs 
of our people ought to be kept free from political 
jugglery. 

Despite the progress made and the vantage posi- 
tion we occupy, the hearts of all sincere men yearn 
for the better day when the industrial strife and bit- 
ter feeling engendered by our economic develop- 
ment may be assuaged. In hoping and striving for 
that time, it is a libel upon the efforts of all to dis- 
parage and discredit the successes already achieved. 
Each effort made and thought given in solving the 



74 Labor Unions 

problems which confront us day by day is tending 
toward the goal for which the whole past of the hu- 
man race has been but one continuous preparatory 
struggle. Encourage the organization of the work- 
ers, help to make the path of progress easier, and 
lift up the hands of those who are endeavoring to 
bring about economic and social progress upon the 
lines of least resistance, conforming to the very best 
thoughts and efforts for practical amelioration and 
final emancipation. 

Note. — Students are referred to Six Centuries of Work and 
Wages, by Thorold Rodgers ; Modern Trade-Unionism, by Sidney 
Webb ; the books and pamphlets on trade-unionism ; the Philosophy 
of Trade Unionism; Efficiency of Trade -Unions ; pamphlets on 
the shorter work-day ; the A?7ierican Federationist, all published by 
the American Federation of Labor. — S. G. 



LABOR UNIONS 

Responsibility of Labor Unions 

by daniel j. keefe 

THE International Longshoremen's Association 
was organized in 1893 for the purpose of bet- 
tering the condition of longshoremen by supplying 
the various local bodies with uniform conditions as 
to the scale of wages, as far as practicable, of elimi- 
nating abuses, of adjusting the many and frequent 
differences that are prone to arise, and of elevating 
the standard of the members, morally and intellec- 
tually. At the outset we encountered much oppo- 
sition, due principally to prejudice on the part of 
the employers, who refused to recognize or meet 
with the committees of our members, feeling that 
we were irresponsible, and that no agreement or ar- 
rangement could be entered into that would bind us 
or compel the organization to respect its obligations. 
The low estimate in which the average dock 
worker was held was, in a measure, responsible for 
the lack of confidence on the part of the employers. 
This condition was largely due to the lack of uni- 
form business methods, or, I might add, the absence 
of methods, as well as the lack of restraint on the 

75 



76 Labor Unions 

part of the men, and the excessive or exorbitant de- 
mands made when the employers were found to be 
at the mercy of the local workers. 

The fact that the labor of a dock-worker requires 
great physical strength and endurance does not 
necessarily imply that the dock-worker must be low 
in the scale of intelligence. While the calling does 
not require a high grade of intelligence, yet the 
high wages incident to organization have raised the 
standard of the dock-workers so that their ranks to- 
day number many mechanics whose trades do not 
offer the compensation of the dock-worker, as well 
as many mechanics whose trade, owing to the intro- 
duction of labor-saving machinery, has relegated 
them to common laborers. Again, it is a well-known 
and recognized economic truth that the higher the 
wage paid to any trade or calling the higher in 
proportion is the intelligence of the worker. 

To-day, to demonstrate how our organization is 
regarded by employers, who looked upon us for- 
merly as irresponsible workmen, we can point with 
pride to a host who are the warmest friends of our 
organization, and who respect any agreement we 
make, with the feeling that no unfair or undue ad- 
vantage will be taken by the dock-worker who is a 
member of our organization. 

The longshoremen's or dock-workers' organiza- 
tion is one of the few institutions that meets with 
its employers in joint conferences or conventions to 
settle questions of wages and other conditions, to 
remain in full force and effect for a certain period. 
And we can say, without fear of contradiction, that 



Daniel J. Keefe 77 

we have had very little dissatisfaction found on the 
part of the employers on account of our failure to 
carry out such agreements. In our different ar- 
rangements that cover the various kinds of dock 
work we always have a clause inserted, ''that, in the 
event of any dispute arising between our men and 
their employers, the men will continue to work with- 
out any strike or lockout until such time as the dif- 
ferences are adjusted by arbitration, as provided for 
in said agreement." 

There is no question about the arbitration being a 
success, as the arbitrators are selected as follows: 
"The employees to select one, the employers to se- 
lect one, and they two to select the third arbitrator; 
but in the event of their not being able to agree on 
the third arbitrator, then each side shall select a dis- 
interested arbitrator, and those two shall select the 
third arbitrator. The finding of the majority to be 
final." 

The longshoremen's organization has insisted on 
all its agreements being carried out in both letter 
and spirit. To illustrate the fairness with which the 
longshoremen deal with their employers : we have in 
the port of Buffalo a local union who violated their 
agreement with their employers during the month 
of July, 1900, while a convention of longshoremen 
was being held in Duluth, Minn. The matter was 
brought to the attention of the convention, and it 
immediately notified our local representative to fur- 
nish men at our expense to take the places of our 
men who had violated the agreement, and they were 
not members of our organization. 



78 Labor Unions 

We had another instance of violation of the ar- 
bitration clause by one of our locals at the port of 
Cleveland. The organization instructed the men to 
return to work and submit their grievance to arbi- 
tration, which they did. The arbitration board ren- 
dered a finding in favor of the men. Those were 
the only two violations of any consequence that oc- 
curred during the year of 1900. 

We contend that when the employers will meet 
with their employees in joint conferences and con- 
ventions, discuss the questions of wages and other 
conditions pertaining to their mutual interests fairly 
and freely, and after due and careful consideration 
enter into an agreement, which agreement shall 
guard against any strike or lockout and provide that 
all differences shall be adjusted by some method of 
arbitration, a long step in the right direction has 
been taken. For during these discussions the em- 
ployers and employees can become acquainted with 
each other and understand that their interests are 
mutual, and that they are not watching to take any 
advantage that may offer of each other, but, on the 
contrary, are ready to co-operate with each other 
and bring about the very best possible results for all 
parties concerned. 

When the employer can understand that his em- 
ployee is not awaiting the opportune moment to take 
undue advantage of him by compelling him to com- 
ply with unreasonable and exorbitant demands, and 
the employee, on the other hand, can understand 
that the employer is not trying to reduce his condi- 
tion to slavery by paying only starvation wages and 



Daniel J. Keefe 79 

taking any other advantage that might offer to re- 
duce the condition of his employee — when this thing 
can be understood, which there is no doubt in my 
mind that it can be if the employer will meet with 
his employees, and give the employees an oppor- 
tunity to present their demands (the employer, on 
the other hand, will have the same opportunity to 
show his employees that the conditions will not per- 
mit of his complying with their demands), there is 
no question that a great amount of friction will be 
prevented. 



LABOR UNIONS 

Labor Unions and the Living Wage 

by henry white 

WHILE other contributors have courageously 
labored to solve what is called the labor 
problem, I will have to vary the discussion some- 
what by disclaiming any such intention, and for the 
obvious reason that I do not consider the problem 
solvable. By a solution I mean a particular way out 
of the present dilemma, a method of putting an end 
to industrial strife through such an adjustment of 
our economic relations as would remedy social in- 
equalities and insure lasting peace. 

Salvation, as I see it, does not lie in any social 
scheme or plan. I have no faith in set theories or 
doctrines which promise quick and sweeping results 
and which ignore the tedious growth of society as 
taught by five thousand years of history. Consider 
what sacrifice and struggle are necessary even to 
achieve moderate reforms. If we attain all we now 
strive for, who can foretell what our desires will be 
to-morrow and what problems may in consequence 
arise? Where is there a limit to our ambitions and 
who will attempt to prescribe it? The workmen of 

80 



Henry White 81 

a thousand years ago would probably have felt 
contented with what we now have. Our very discon- 
tent is due to the larger conception of our possibili- 
ties, to the widening of our horizon, and is in itself 
healthful, as it indicates a longing for something 
better. There is such a thing as a rational discon- 
tent. 

Instead of a solution, I hope for less injustice, 
more humanity, for a larger participation by the av- 
erage person in the benefits of civilization. The 
influences which make for genuine progress are those 
which advance education, promote morality, stimu- 
late self-reliance, and arouse higher aspirations. 
The hope for a higher social order must depend 
primarily upon the perfection of the individual 
rather than upon a plan for remodelling society. 
There is no short cut to emancipation, and social 
growth cannot be forced, although I do not wish to 
depreciate the value of favorable environment. 

It is the improvement of the individual, both as 
to character and capacity, and the influences which 
aid it, with which I am primarily concerned. Our 
body politic, like the human body, is so complex a 
subject as to border upon the infinite. Those who 
pretend to know, and who in either case attempt to 
prescribe, positive cures for its ailments, we distrust. 
We instinctively prefer the cautious physician, who 
carefully diagnoses every separate case as it presents 
itself, before venturing an opinion, and then applies 
the best remedy known to medical science. To ad- 
minister to the health of the social organism, is a 
similar undertaking. There are well-known rules of 

6 



82 Labor Unions 

health, the result of accumulated experience, which 
point out what to do. Meagre as these rules are, 
they are nevertheless a guide, and the only one we 
know. It is the conditions which encourage a 
healthful growth that deserve the first attention; 
the rest we can attend to as we proceed. 

The one great factor rapidly changing the status 
of the wage-earner and enlarging his capacity and 
moulding his character along new lines is that of as- 
sociation. It is the ability to act concertedly that 
distinguishes the workman of the present day. 
Until a few generations ago the laborer was a de- 
pendent, and accepted the conditions imposed upon 
him without complaint. History hardly makes even 
a reference to the great body of toilers who consti- 
tuted the most useful element in society. They 
were but detached units and without a voice. It 
was for them to toil and reproduce and furnish the 
material for the armies. In the impressive words of 
Markham, they stood "stolid and stunned, a brother 
to the ox; a thing that grieves not nor hopes." 

The coming together of the workers in larger 
groups has developed a common interest among 
them, and the subjection to uniform conditions 
which single individuals cannot alter has encouraged 
common action. Their relation to the employer hav- 
ing become less personal and intimate, they are en- 
abled to understand that the employer naturally 
pursues his interests regardless of theirs, and that 
they consequently must uphold their own if they 
hope to counteract the tendencies bearing down 
upon them ; that if they permit themselves to be 



Henry White 83 

pitted against one another they will be held down 
to a common level. They have found that they 
have to bear also the brunt of the competition be- 
tween employers, as the employer who can produce 
more cheaply obtains an advantage which induces 
the others to do likewise. To offset the influences 
which keep them close to the lifeline requires united 
resistance, and it is this resistance which epitomizes 
the labor problem. 

For centuries it was held by economists, and is 
even now, that for the sake of national greatness and 
supremacy in the markets of the world it became 
necessary for the workers to subsist upon less in or- 
der that production might be made cheaper. In 
other words, they were called upon to sacrifice 
themselves for the rest of society, while interest, 
rent, and profit continued undiminished. The bur- 
den was always thrown upon them, because they 
lacked resistance, and only when they became 
troublesome were they considered. Improved ma- 
chinery, while it also benefited them when the nat- 
ural adjustment had taken place, for the time being 
shut them out of trades which they had spent a life- 
time in learning. 

The statement repeated so monotonously about 
"the natural harmony which exists between capital 
and labor" does not point to a way out of the diffi- 
culty. The inference is drawn from it that disputes 
between employer and employed are contrary to the 
natural order of things, and therefore unnecessary 
and harmful. The fact that these differences do ex- 
ist and often reach such magnitude and intensity as 



84 Labor Unions 

to threaten the security of society, proves that this 
supposition, if true, contains only a part of the 
truth. 

Suppose you should- say to the sweated tailor 
striking for a lighter task, or to the coal miner fight- 
ing the abuses of the "pluck-me store," "My man, 
this should not be, because the interests of capital 
and labor are identical " — or if you should go to the 
employers and use the same arguments, how would 
it appeal to them, and how much nearer would both 
be brought to an understanding? Would it not im- 
press you that while in a general sense there is 
harmony between capital and labor, because both 
are essential to production, there is a conflict of in- 
terest somewhere, and that it is between the particu- 
lar capitalist and laborer over the share each is to 
receive of the proceeds? 

This explains the nature of the industrial disturb- 
ances and the difficulty of solving this grave prob- 
lem. If perchance there was a way of determining 
how much of the results of industry each would be 
entitled to, the problem would be reduced to a ques- 
tion of arithmetic, but as under our complex system 
of production it would be impossible even to ap- 
proximate it, the compensation of the wage-worker 
must needs depend upon his ability to cope with the 
employer. Without the ability to unite and limit 
the competition between the individual workers for 
employment, the "iron law of wages" of the econo- 
mist must operate to keep wages down to the point 
which will barely enable him to live according to the 
Customary standard of living. 



Henry White 85 

In that event non-resistance would mean peace of 
a certain kind, and there would be no labor problem 
to vex us. The disturbance only occurs when the 
wage-earners are moved with the ambition to raise 
themselves in the social scale, and to share more 
largely in the benefits of progress. The vital dis- 
tinction must be made between the peace of serf- 
dom and peace obtained through compromise and 
adjustment between the two forces meeting on a 
footing somewhat equal. Where the wage-workers 
are so situated as to be able to enforce a demand or 
offer resistance, peacemakers can exert an influence 
helpful in mitigating the severity of the strife, in 
keeping it within bounds, and preventing unneces- 
sary waste. Third parties can render service in that 
respect which would be invaluable, but it is a mis- 
take to suppose that peace can be maintained by 
some preconceived plan of arbitration. A conflict 
can be avoided only where the apparent cost to both 
would be such as to make concessions expedient. 

A condition approaching peace, involving at the 
same time the independence of the laborer, is possi- 
ble only where the employer treats with his em- 
ployees collectively and is willing to abide by the 
standards upheld by the union. Now that the per- 
manent character of the trade-unions is being rec- 
ognized, there is less disposition on the part of 
employers to try to destroy them, and a willing- 
ness to treat with them, as established and servicea- 
ble institutions, which is powerfully promoting the 
cause of industrial peace by creating more forbear- 
ance on either side. 



86 Labor Unions 

Considering the status of employer and employed, 
the former represents the buyer of labor power, and 
as such can exercise the discrimination of one who 
goes into the market to buy when the supply is 
great; and the workman (the seller), pressed by im- 
mediate wants, cannot afford to put his living com- 
modity on the shelf to await a favorable purchaser. 
There is little justice in a situation which compels 
one person to accept less for his labor because an- 
other person more hard pressed is willing, or rather 
is obliged, to work for less. In regard to the em- 
ployer, his struggle, although often severe, is a mat- 
ter of more or less profit. He has a large stake in 
view. With the laborer, on the other hand, it is a 
matter of mere subsistence, with want only a short 
way off. He must calculate upon periods of idle- 
ness, which bring suffering and despair. The priva- 
tions of a strike are, therefore, his frequent lot, and 
while on a strike at least he suffers with hope of 
relief. 

This will explain the militant character of the 
labor movement. Its whole object is to overcome 
the predicament of the workers by making it diffi- 
cult for the employers to treat with them separately. 
It is offensive because there is much for them to 
gain and little to defend. It must force its way be- 
cause it disregards precedents and established cus- 
toms and seeks to create new and higher standards 
and strives to get away from the gloom of the past. 
It declares that prices shall be governed by fair 
wages instead of wages by prices. It sets up a new 
standard for measuring values. The movement is as 



Henry White S7 

much social as it is economic, and is a part of the 
world-wide democratic movement the spirit of which 
it expresses. It stands for more than collective 
bargaining. It insists upon a living wage instead of 
a competitive wage — a wage commensurate with the 
state of civilization in which we have our being. 
Unless this fundamental difference between em- 
ployer and employed is grasped and the character of 
the trade-unions understood, the meaning of the in- 
dustrial strife cannot be comprehended. 

As to the motives which actuate individual capi- 
talists and laborers, there is no moral difference. It 
is the circumstances which cause conflict of interests 
and influence their conduct. When they chance to 
exchange positions, which frequently happens, they 
will fight just as eagerly on the side which they 
formerly opposed. There is, however, a great dis- 
tinction to be made in the motives which influence 
numbers and single individuals. It is impossible for 
many to act together for a length of time unless they 
are moved by a high purpose or by a deep sense of 
wrong. They may be misguided, they may lack 
discretion, but their motive must always be worthy. 
When a person, in order to advance himself, is 
obliged to cast his lot with his fellows, so as to help 
raise the whole, his act becomes altruistic. The em- 
ployer, on the other hand, however much he may 
serve society as an organizer or captain of industry, 
is so placed that his incentive is to use the oppor- 
tunities at hand for personal gain. 

As much importance as I attach to the labor 
movement, I am free to say that I would fear, in its 



88 Labor Unions 

present status, its ascendency over society. Or- 
ganizations feed upon power, for which they have 
an insatiable appetite. The interest of society is 
best served by not suffering any one power to domi- 
nate to such an extent that it could afford to defy 
public opinion or ignore the principles of justice. 
Stagnation always follows complete submission to a 
single authority. When the military or the Church 
held sway this was exemplified. When the State 
gained the ascendency individual liberty was sup- 
pressed, and again when the individual became 
stronger than the State anarchy followed. Judging 
from the unmistakable examples of history and from 
what has already been demonstrated, if trade-unions, 
like other bodies, were not checked at some point, 
the demands of the members would know no rea- 
sonable bounds. Leaders who would counsel mod- 
eration, as often happens, would be swept aside. 
This danger, however, is only remote, as workmen 
by the very nature of things could not insist upon 
demands which would cripple industry or eliminate 
profit. The consequences would have a sobering 
effect. At all events, the employer occupies the 
stronger position. If hard pressed he could always 
seek refuge in combination, and it is far easier for the 
influential few to combine than for the many. 
Power, it is true, lies with the masses, yet the peo- 
ple rarely unite their efforts or understand their 
common wants. 

Trade-unions alone furnish the means for sus- 
tained and concerted action on the part of the ma- 
jority. With all their faults and shortcomings, they 



Henry White 89 

represent a great stride forward of the race. It is 
more important by far that the masses should forge 
ahead a little than for the few to advance a great 
deal. Society is stronger when the general average 
is raised; this is the prime essential of democracy. 

Well-intentioned persons, instead of combating 
trade-unions, could devote their energies and talents 
to no better purpose than to help guide their de- 
velopment along such channels as would enable them 
to fulfil their greatest usefulness. The unions offer 
the channel in which discontent may express itself 
in a legitimate and orderly manner. Having suf- 
fered the consequences of ill-considered action they 
have been taught caution. The turbulent and ex- 
treme methods which marked the initial stages of 
the trade-union movement have given way to a 
moderate policy. The wisdom of relying upon 
small but steady gains is impressing itself upon the 
membership, and there is a disposition to work along 
the line of least resistance. This is creating a spirit 
of forbearance which augurs well for the future. 



PART III 

TRUSTS AND LABOR UNIONS FROM A 
LEGAL ASPECT 

a. Control of Trusts. 

b. Is it Necessary or Desirable that Labor Unions 

be Incorporated to Make Them Legally and 
Financially Responsible for Contracts and 
Agreements? 

c. Could Labor Unions if Incorporated Rely upon 

Fair Treatment from the Courts? (How about 
methods of legal procedure; "government by 
injunction " ; legal delays which put the capital- 
ist at such an advantage as to amount to the 
denial of justice to the laborer, etc.?) 

d. What Rights, if any, Moral or Legal, has the 

Workman in the Plant of the Work (compar- 
able, for instance, to tenants' rights in land 
under British legislation in Ireland)? 



91 



SYNOPSIS 

Holt. Danger in both trusts and labor unions, lack of legal con- 
trol — Law needed to control trusts — Supervision similar to 
that exercised over railroads in Massachusetts — Board of super- 
visors of corporations — Power to prevent fraudulent issues of 
stock — Authority to require periodical reports — Present laws 
adequate to control labor unions if enforced — Governors ulti- 
mately responsible for present non-enforcement — Government 
by injunction a serious evil — Courts of arbitration desirable. 

Leavitt. Government by injunction illegal — Dangerous in its 
effects — Courts stand for rights of property, not rights of men — 
Trade-unions if now incorporated could not secure justice — Ul- 
timately incorporation desirable — Workmen have moral right 
in plant — Unions should more actively discountenance violence. 

Warner. Labor unions necessary — Tend to betterment of com- 
munity — Better understanding of capitalist and laborer needed — 
Appeal to force condemned — Legal methods inappropriate — 
Arbitration casual expedient — Labor's share constantly in- 
creasing — Natural monopolies should belong to community 
— Principles of single tax valid — Right to work — Free trade. 



93 



LEGAL ASPECT 

Laws and Their Enforcement 

by george c. holt 

THE question how to promote harmonious rela- 
tions between capital and labor is obviously 
not only the most important, but the most difficult 
question which confronts modern society. No sensi- 
ble man can feel confident that the adoption of any 
particular measures would remedy the existing labor 
difficulties. What is needed, however, are not loose 
denunciations of the evil, but specific suggestions 
for a remedy. With a slight hope of possibly con- 
tributing something to such a discussion, I will state 
what seems to me to be the essential things which 
need correction and the practical measures which 
might be taken to correct them. 

Most people, if asked to-day what are the greatest 
dangers which now menace the country, would re- 
ply that they are the trusts, or the labor unions, or 
both. What is the real cause of this universal ap- 
prehension of danger from these great organizations 
of capital and of labor? 

It is a mistake to suppose that the intelligent 
part of the American public are hostile to great 

95 



9 6 Legal Aspect 

corporations and trusts because of the immense 
aggregation of capital in them and the enormous 
power which this aggregation of capital gives them. 
Great power anywhere is dangerous, but it is only 
dangerous in a free government when it is uncon- 
trolled by law. Under the rule of law great power 
is beneficent. Modern experience tends more and 
more to show that great accumulations of capital 
are essential to efficiency in production. Superficial 
observers object to the amalgamation of different 
factories into a trust just as they objected to the 
destruction of the hand-loom by the establishment 
of the factory ; but the steady and resistless progress 
of the present age toward greater and still greater 
aggregations of capital in industrial enterprises is 
obviously nothing but the inevitable ultimate result 
of the invention of the steam-engine. 

It is a still greater mistake to suppose that intelli- 
gent Americans are hostile to trade-unions because 
of the vast power which such organizations exert. 
Here again great power, rightly exercised, is in the 
highest degree beneficent, and more and more in 
recent years the conviction has grown in the com- 
munity that working men's organizations, upon the 
whole, notwithstanding their faults and mistakes, 
have exerted a great influence for the protection 
and the improvement of the condition of those 
whom they represent. 

The real cause of the general fear of trusts and of 
working men's organizations is the fact that they are 
not adequately controlled by law. They are insti- 
tutions of vast power, capable of inflicting vast 



George C. Holt 97 

injury, which the law does not completely control. 
All persons in this country are theoretically subject 
to the law, and almost all the persons and institu- 
tions existing in it are actually controlled by the 
law. The law, with its prohibitions and its punish- 
ments, in most cases deters wrong-doing in advance, 
or, when it occurs, punishes it; but the law in the 
case of both the large corporations and the trade- 
unions either practically contains inadequate pro- 
visions against frauds and wrongs, or, if it contains 
adequate provisions, provides inadequate penalties 
for their violation. 

Fraudulent Corporation Methods and the 
Remedy. — Consider in the first place the case of or- 
dinary business corporations in this country. There 
are, of course, very numerous instances in which 
such corporations have been organized and con- 
ducted by men of the highest character on principles 
of the highest business integrity; but, viewed as a 
whole, it may fairly be said that American business 
corporations have very frequently been fraudulently 
organized. Their stock usually far exceeds the 
capital paid in, and their bonds usually far exceed 
the money obtained upon their issue, and the issue 
of such stock or bonds and the sale of them to the 
public is simply a fraud. The laws under which 
business corporations are organized usually provide 
that the stockholders shall be liable to creditors if 
the capital is not fully paid in, but creditors are not 
the most important class in this matter. It is the 
public, defrauded by the issue of sham securities, and 
the workmen, defrauded by the claim that their 



98 Legal Aspect 

wages must be reduced in order to pay adequate 
dividends on watered stock, who are the worst suf- 
ferers, and' for them the law affords no remedy for 
the dishonesty of the directors. 

The absence, too, of any adequate means of investi- 
gating the management and ascertaining the actual 
condition of business corporations, leaves both the 
stockholders and the workmen substantially at the 
mercy of the directors. They act in secret. If they 
are guilty of any misconduct it generally can be con- 
cealed, and any assertions they make as to the con- 
dition of the business cannot be easily tested or 
disproved. 

The universal belief, which such a system has 
created, of the dishonesty of the general manage- 
ment of business corporations in issuing billions of 
fictitious securities and in the conduct of its busi- 
ness in the individual interests of its directors, lies at 
the bottom of the mistrust of them by the people, 
and especially by the working classes. It has cre- 
ated a universal prejudice against them. In any dis- 
pute between them and their workmen most of 
the people of this country tend to sympathize with 
the workmen in advance of any investigation of the 
merits of the controversy, from a deep-seated con- 
viction that the administration of the corporations 
of this country has been dishonest, and that they 
can well afford to treat their workmen better. 
Especially is this the case whenever a controversy 
arises about wages. Whenever a corporation asserts 
that it must reduce wages, or that it must deny an 
application by its workmen to raise wages, because 



George C. Holt 99 

its earnings are insufficient, the universal reply in the 
minds of the workmen and the community is that 
probably its earnings would be sufficient to justify 
the wages asked if all its securities simply repre- 
sented actual value received. 

The fundamental evils, therefore, in the adminis- 
tration of American business corporations are that 
they have practically power to issue fictitious obli- 
gations and to conceal the actual condition of the 
business, and the first steps to take are absolutely to 
prohibit the issue of inflated securities and to enable 
any persons interested easily and accurately to as- 
certain their condition. To practically accomplish 
these objects there should be appointed in each 
State a board of supervisers of corporations, which, 
for convenience of administration, would undoubt- 
edly be divided into sections, each having charge of 
the various kinds of corporations. No corporation 
should be permitted to do business or to issue se- 
curities of any kind except upon obtaining the 
certificate of such a board fixing the amount and 
character of the securities to be issued. The cor- 
poration should furnish legal proof of the actual value 
of its property, and the board should be vested with 
ample judicial power to investigate the actual con- 
dition of the company. Such a system in regard to 
railroads has been in operation in Massachusetts for 
many years. No railroad corporation in Massachu- 
setts can issue stock or bonds except upon the cer- 
tificate of the Railroad Commissioners of the State, 
which is only obtained after a judicial investigation 
of the value of the corporate assets. The result is 

LtfC. 



ioo Legal Aspect 

that the stock and securities now issued by Massa- 
chusetts railroad companies represent actual value. 
There is no reason why the same system could not 
be applied to the administration of all corporations. 
If such a law were established in this State and 
made applicable not only to all corporations there- 
after created in this State, but to foreign corpora- 
tions thereafter attempting to do business in the 
State, the whole system under which, in the last 
fifty years, billions of inflated securities have been 
sold to a defrauded public, and which, more than all 
other causes put together, has impaired American 
credit and embittered the relations between capital 
and labor, would be permanently abolished. 

Authority should also be conferred on such a 
board to require periodical reports from all corpora- 
tions of the condition of their business, and the 
board should have power in addition to examine the 
books and investigate the actual condition of such 
corporations. Banks, trust companies, insurance 
companies, and railroad companies have long been 
subject to such supervision and examination by 
commissioners appointed by the State, with excel- 
lent results. Why should not all corporations be 
subject to a similar supervision? What reason is 
there why the Chemical Bank or the Mutual Life 
Insurance Company should be under complete pub- 
lic supervision and control, while the Standard Oil 
Company or the United States Steel Company is not? 

The Remedy for Strike Violence. — The 
most obvious ground for the apprehension with 
which many Americans regard the working men's 



George C. Holt 101 

organizations and the cause which they represent is 
the disorder and violence frequently attending 
strikes. The trade-unions claim that they are not 
justly responsible for the violence which occurs, and 
their claim is probably, to a considerable extent, 
true. The great mass of American workmen are 
honest and law-abiding men, who have organized in 
unions, not for the purposes of disorder and vio- 
lence, but for their own protection, and a great deal 
of the disorder attending strikes is undoubtedly due 
to a few rash and disorderly workmen, joined by all 
the disorderly element in the community. What- 
ever the truth may be in this respect, the violence 
and disorder attending strikes is an enormous evil, 
and it has a constant tendency to develop and in- 
crease. There is no higher duty imposed upon the 
officers of the law than to put an end to it. The 
question is, How shall it be ended? 

The favorite remedy at the present time seems to 
be to immediately call out the troops and to sup- 
press mob violence by military force without resort- 
ing to any other means of suppression. In my 
opinion there is something absolutely horrible in 
this very modern method of instantly calling out and 
using the military force to suppress the rioting and 
violence incident to strikes. It is a very modern 
plan. It seems to be an incident of the strange de- 
velopment of the military spirit in this country in 
very recent years. Formerly troops were never 
called out to suppress an ordinary local riot until all 
other means failed. In England the Riot Act was 
always first read, time was given for the crowd to 



io2 Legal Aspect 

disperse, and the sheriff and his constables arrested 
the ringleaders and dispersed their followers, if possi- 
ble. If ordinary force was not enough, special con- 
stables were sworn in, and it was not until all other 
means of suppressing the disorder failed that the 
magistrates took the terrible responsibility of calling 
on military force to fire upon the people. In recent 
years in this country as soon as a strike occurs the 
State militia are immediately ordered to the spot. 
If there is any actual fighting at all, it is usually a 
street fight in a crowded city, a form of fighting that 
calls for the greatest discipline and self-restraint on 
the part of the soldiers. There is constant danger 
under such circumstances that a spirit of revenge 
will seize the officers, or a kind of panic of self-de- 
fence will seize the soldiers, and an indiscriminate 
firing take place with terrible results. Of course, 
rioting must be put down, and if it is so serious that 
it cannot be put down in any other way it must be 
put down by military force; but no magistrate or 
executive officer who, without making any prelimi- 
nary efforts to maintain order, calls at once on an 
armed military force to suppress mere local rioting, 
is fit to be intrusted with the enforcement of the law. 
Another remedy has in recent years been in- 
vented: that of a suit in equity for an injunction to 
restrain acts of apprehended violence. This remedy 
is vastly better than an immediate call upon the 
troops. Any form of legal procedure is preferable 
in a free government to military force. But al- 
though the Supreme Court of the United States has 
substantially decided that in an appropriate case in 



George C. Holt 103 

which the property or the operations of the Govern- 
ment are interfered with a court of equity can act, 
there still remain great practical difficulties in sup- 
pressing violence by such means. The process and 
methods of proceeding in a court of equity are ill- 
adapted to such purposes. The general principle 
has been well settled for centuries that courts of 
equity have no jurisdiction to restrain the commis- 
sion of an apprehended crime, and it is still doubt- 
ful, notwithstanding the decision in the United 
States Supreme Court in the Debs case, whether 
any court of equity has jurisdiction to restrain ap- 
prehended mob violence when no property rights or 
operations of the Government are interfered with. 
At all events, whatever be the mere power of courts 
of equity to interfere, there are very weighty practi- 
cal objections to their interfering. Such a jurisdic- 
tion is novel. The workmen of this country regard 
it as a modern device of courts and lawyers, acting in 
the interest of capital. Its exercise is creating a 
public prejudice against the judiciary, the results of 
which may be most deplorable. The trial of crimes 
by a jury, and not by a judge, is a legal right and 
has always been the custom in Anglo-Saxon com- 
munities. It is the best tribunal to try crimes ever 
devised. It acts promptly. It tests evidence by 
common-sense. It gives no reasons for its verdict. 
And, above all, it immediately dissolves, so that no 
public prejudice can form against it, as it can against 
any permanent judicial tribunal. 

What, then, is the remedy for the use of violence 
in strikes? In my opinion it is the plain, old- 



104 Legal Aspect 

fashioned enforcement of the criminal law, by a jury 
in important cases and by police magistrates in unim- 
portant cases. It is said that this method has failed. 
I admit that it has been largely disused, but that is 
the fault of district attorneys, sheriffs, police offi- 
cers, and police magistrates. Most of these officers 
are politicians. They are never free from the fear 
of losing votes. As soon as a strike is settled they 
condone and ignore all the acts of violence that have 
taken place jn it, and the community acquiesces. In 
the case of serious crimes the necessity of indict- 
ments and jury trials involves some delay, and these 
cases are usually ultimately abandoned by the dis- 
trict attorneys. I deny that the fault is with the 
superior courts or with juries. They will do their 
duty in such cases. The result of this neglect to 
prosecute those guilty of violence in strikes is that 
as soon as a new strike occurs all the disorderly ele- 
ment in the community feel that they can resort to 
any kind of violence with impunity. What should 
be done is to put down the disorder attending strikes 
in the beginning. Rioting is a crime by common 
law and by statute, and disorderly conduct in 
public places is a penal offence. If, at the begin- 
ning of the violence attending strikes, the police 
would arrest a dozen of the ringleaders, and the 
police magistrates would promptly send them to 
prison for a month, or even for a week, the rioting 
and disorder would soon stop. Criminal punishment 
does not necessarily need to be severe in dealing 
with local tumults. It should be prompt and sure, 
but it may well be light in such cases. And if light 



George C. Holt 105 

punishments do not sufficiently deter, and more 
serious crimes are committed, the criminals should 
be speedily arrested, indicted, tried by a jury, and, 
if convicted, punished. In nineteen cases out of 
twenty a prompt and just administration of the 
common criminal law will put an end to disorder. 
This is the just way and the merciful way, not only 
to working men, but to the entire community. If 
the district attorneys, sheriffs, and police authorities 
do not repress the disorder, and refuse to do their 
duty, the Governor has ample and summary power 
to remove them and put men in their place who will. 
The true responsibility in all such cases rests ulti- 
mately on the Governor of the State, and he should 
be held to a strict accountability for the enforcement 
of the law. 

If now, on the one hand, the great corporations 
which employ labor had to earn dividends only on 
securities actually representing capital invested, and 
full publicity was given to their administration of 
the corporation, and, on the other hand, workmen 
could not exercise any violence or intimidation to 
support a strike, many of the strikes which now oc- 
cur would not take place. If a corporation could 
not afford to pay wages asked for or accede to any 
unjust demands, it could prove it. The great mass 
of American workmen have sense enough to know 
that their wages cannot be raised when the company 
is in fact not earning enough money to pay them, 
and that demands which are inherently unjust can- 
not be conceded. On the other hand, at the pres- 
ent time, the readiness of working men to strike for 



106 Legal Aspect 

an insufficient cause is undoubtedly increased by the 
fact that they know that a strike will be accom- 
panied by violence and intimidation. Even if the 
organization is not strictly responsible for such vio- 
lence, it knows that it will occur, and the fact that 
it will occur undoubtedly is a consideration influenc- 
ing at least the more hot-headed and unreasonable 
members of the organization to try to coerce their 
employers by at least threatening a strike. A 
threat, however foolish, once made must in consis- 
tency be carried out, and in this way doubtless 
many indefensible strikes develop against the better 
judgment of the wiser workmen. 

A Court of Arbitration.— But, of course, un- 
der any circumstances, controversies will always 
arise, to a greater or less extent, between the em- 
ployers and the employed, and, as in all cases of 
controversies between any parties, the essential 
thing is to have an impartial tribunal to decide them, 
instead of leaving the parties to coerce each the 
other by brute force. The one method is the method 
of civilization, and the other of pure savagery. A 
court should be appointed to which labor controver- 
sies could be taken. It should not only be a court 
to which the parties could voluntarily submit con- 
troversies for arbitration, but it should also be a 
court into which either party could, if necessary, 
compel the other to come, like any other court of 
justice. If the parties to a labor dispute are indi- 
viduals or corporations, of course there is no diffi- 
culty in conferring jurisdiction of their controversies 
upon any court. Some persons seem to suppose 



George C. Holt 107 

that jurisdiction cannot be conferred over an unin- 
corporated labor union or organization of any kind, 
but this is certainly a mistake. The law of this 
State permits any organization of persons more 
than seven in number to be sued in the name of the 
president, and there is no inherent difficulty in hav- 
ing any organization, whether incorporated or unin- 
corporated, subject to the law. Most of the large 
express companies in this State are unincorporated 
companies, but there is no difficulty in their suing 
or being sued. No body of men can get together 
and organize for any purpose without having offi- 
cers, and as soon as the organization has officers, 
process may be authorized to be served upon them 
and enforced against them. The idea that there is 
something mysterious about the trusts and labor 
unions by which the law cannot be made to control 
them is simply preposterous. The matter may be 
difficult, as all new applications of law to compli- 
cated situations are difficult, but it can be done. 
The court appointed should perhaps be, in the first 
instance, a court of conciliation. Possibly it would 
be better that it should have no power of itself to 
enforce its decisions. If its decisions are not com- 
plied with, it might be provided that applications 
could be made to the established courts to enforce 
them. There should, however, be power somewhere 
to enforce them, as a last resort. Law is not effec- 
tive without power to enforce its decisions. 

Suppose such a court established. How would 
it work? Take a simple case: for instance, a strike 
for wages. Suppose the court decided that the 



108 Legal Aspect 

corporation ought to pay the increase demanded. 
Why should not a court order the directors of the 
corporation to pay it and to agree to pay it in future, 
and, if they disobeyed the order, commit them for 
contempt? On the other hand, suppose the board 
decided that the increase demanded was unjust. 
Why should not a court order the committee of the 
union which ordered the strike to rescind its order 
and direct the men to go back to work, and, if the 
committee disobeyed the order, commit them for 
contempt? But, it will be said, you cannot order 
men to work if they do not want to work. Un- 
doubtedly ; but the handful of men whose order has 
caused thousands to stop work can be ordered to re- 
scind their order, and if that is done in good faith 
the men would almost certainly return to work. If 
they refused, it would, in most cases, indicate that 
the committee, while in form obeying the order, 
had, in fact, secretly disobeyed it. But, in fact, the 
matter would not usually go so far. The decisions 
of the Railroad Commissioners, the Interstate Com- 
merce Commissioners, and of similar boards, having 
no actual power to enforce decisions,' are usually ac- 
cepted and acted on voluntarily. A just and impar- 
tial decision of any controversy by a disinterested 
third party carries great weight of itself. And if 
that should prove insufficient, a few instances of 
imprisonment for contempt by a court which had 
the genuine respect of the community would have 
an immense influence. That would be a proper case 
for government by injunction, for the injunctions 
would be as often issued against the corporations as 



George C. Holt 109 

against the workmen. The whole tendency of 
modern judicial decisions has been more and more 
to protect and enforce the just rights of working 
men and of labor organizations, and there can be no 
just ground for fear that under such a system the 
injunction would always go against the working 
men. 

At all events some remedy must at least be tried. 
It is a disgrace to modern society that nothing 
efficient has ever been done to put a stop to the 
ever-recurring war between labor and capital. It 
not only causes enormous waste and loss, but it 
tends to anarchy and to ruin. This republic means 
not liberty alone, but Anglo-Saxon liberty, regu- 
lated by law. Any other kind of liberty leads to 
"the red fool fury of the Seine." 



LEGAL ASPECT 

Rights of Property and Rights of Men 

by john brooks leavitt 

THE point of view is often material. In this in- 
stance it is that of one who, by reason of a 
long line of professional ancestors, clerical, medical, 
and legal, began life with an inherited stock of con- 
servatism, some of which he has had to exchange 
for more progressive views, because of the growing 
conviction that while individualism may provide 
the true remedy for the ills produced by the indi- 
vidual, yet there are evils which society creates and 
society alone can cure. 

It is superficial to say that the State is merely a 
collection of individuals. It is indeed that, but it 
is more. There is a personality in an association 
of persons, a composite individuality, so to speak, 
which lives and moves and has its being distinct 
from them. The spirit which stirs a mass meeting 
or moves a mob is not merely that which animates 
each man. Hence the conservatism which preaches 
the improvement of the individual as the sole cure 
for social ills will never improve the world. Via 
media is always the safe way. It is because the cen- 

110 



John Brooks Leavitt in 

tripetal and centrifugal forces of nature are in 
perfect equilibrium that the world moves swiftly, 
silently, successfully through space. If our social 
world is to do likewise we must balance the forces of 
conservatism and radicalism in some way that will 
give equal play to each. I find that balance in the 
idea that the individual must improve himself and 
society must improve itself. 

If an illustration is needed it is to be found in the 
conduct of directors of corporations, who, when act- 
ing as a body, countenance theft, bribery, extortion, 
tyranny, lawlessness, trickery, and fraud, which as 
individuals each man would abhor. I find it in the 
breach of contracts by labor unions which individual 
workmen would deem it a point of honor to keep. 

The old common-law saying that corporations 
have no souls is false. Corporations have souls. 
Governments have souls. Society has a soul. And 
society must see to the evolution of its soul, even as 
must the individual, if immortability — to use a word 
recently coined — is to ripen into immortality. 

The particular questions to which I have been 
asked to speak are two : 

First. — What rights, if any, moral or legal, has 
the workman in the plant of the work, comparable, 
for instance, to tenants' rights in land under British 
legislation in Ireland? 

Second. — Could labor unions, if incorporated, rely 
upon fair treatment from the courts? 

Rights of Workman in Plant. — As to the 
first. In respect of legal rights of the workman 
in the plant, the answer must be in the negative. 



ii2 Legal Aspect 

Whether a workman who, by inducement of his 
employer, has bought a bit of the latter's land, and 
built himself a home in the prospect of perma- 
nent employment at the adjacent works, could, in 
the case of a "lockout," and on the principle that 
sauce for the goose is sauce for the gander, obtain a 
little of that judicial sauce styled "government by 
injunction," is an interesting inquiry, but it would 
lead us far afield. I can think of no other theory 
for the assertion of a "legal" right in the plant. 

As to a moral right in the plant, it seems to me 
that the answer should be in the affirmative. Just 
how the moral right can be turned into a legal one, 
cognizable by the courts, is the problem for society 
to solve, and one which it must solve for its own 
preservation. I venture to think that its solution 
can only come through recognition of the principle 
that no man liveth unto himself. We talk of the 
rights of men when we ought to speak of the duties 
of men. We prate of the rights of property, and 
forget that many rights of property have been born 
of wrongs of men. Naked came we into this world, 
and naked must we go out. 

Every man should regard himself as a trustee of 
that which he has been taught to call his own. His 
powers, physical and mental, are his "capital," but 
they are capital held in trust for the general welfare. 
The accretions of his capital, the products of his 
labor with hand or brain, which we call property, 
are part of the trust fund, profits of a trust, which 
he may not divert to his own use exclusively, but 
which he should manage for the best interests of the 



John Brooks Leavitt 113 

beneficiaries — himself, his family, friends, neighbors, 
society in general. In the moral world it is not law- 
ful to force a man to do what he will with his own. 
He must will to do right. 

The theologians tell us that Christ's parable of 
the laborers in the vineyard was meant to teach a 
theological dogma as to the efficacy of tardy "con- 
version" in attaining future bliss. To my mind, our 
Lord intended a much more needed lesson in social 
economics. He had declared the Kingdom of 
Heaven to be within us, and when in that parable 
He likens that kingdom to a vineyard where men 
are hired at different hours of the day to labor, it 
seems to me that He was laying down principles in 
regard to the relations between capital and labor, 
which, however much at variance with current ones, 
would, if rightly applied, solve sundry problems. 
To the laborers whose idleness in the fore part of 
the day was only because no man had hired them, 
He accorded the moral right of a living wage, in the 
shape of a whole day's pay. 

Political economists as well as theologians may 
stand aghast at this interpretation of the parable, 
but let us do some thinking along this line. Let us 
study this parable in the light of the idea that it has 
to do with this world instead of the next. The 
workman by his labor makes a contribution toward 
the value of the plant, as does the capitalist by his 
money or the inventor by his brain. Of what value 
is a plant when "shut down " or abandoned? That 
workman has, therefore, a moral right to a continu- 
ance of work in that plant at a living wage, and also 



ii4 Legal Aspect 

to an interest in the accretions by way of profits, 
which are the result of the combination of capital 
and labor in harmonious endeavor. 

This moral right ought not to depend upon the 
whims or the fears, the wisdom or the foolishness, 
of one of the parties to the undertaking, but should, 
with due safeguards, have legal sanction. Is not the 
world dimly groping its way to a recognition of this 
principle? Is it not the duty of society to compel 
such recognition, by public opinion where it may, 
by legislation when it must? 

Incorporation of Labor Unions. — As to the 
second question. My answer is, at first, no; in 
time, yes. 

At present our courts are influenced too much 
by a regard for what are incorrectly called the 
" rights of property," and are sometimes a little too 
oblivious of the "rights of men." To a certain 
extent this may be traced to the general impression 
that juries lean too favorably toward employees. To 
offset that our judges are tempted to think that it 
is their duty to lean toward the employers. Nothing 
could be more dangerous to our institutions than a 
withdrawal of confidence in juries and putting it im- 
plicitly in judges. The latter are just as fallible as 
the former. Indeed, if the truth were told, our 
judges make more mistakes in deciding questions of 
law than do our juries in passing on questions of 
fact. 

The growth of "government by injunction " is a 
pregnant illustration of the dangerous lengths to 
which our judiciary will go unless curbed by an en- 



John Brooks Leavitt 115 

lightened public opinion. From issuing injunctions 
to break up strikes by working men they have gone 
on to granting them to break corners in Wall Street. 
From commanding strikers to stop lawful uses of the 
highway and the exercise of the right of free speech, 
they have begun to order this man not to marry or 
that man not to speak to his jealous neighbor's wife. 
The famous decisions of the Supreme Court in the 
Debs case can be searched in vain for any warrant 
for numerous subsequent injunctions, which can 
only fitly be characterized as judicial usurpations. 
That a writ which had its rise in kingly prerogative 
should be thus misused by judges under a repub- 
lican form of government, is a matter for astonish- 
ment. That our judges should forget the safeguards 
which even in a monarchical government were 
thrown around this power of command, is greatly to 
be deplored. The unchecked use of the power of 
command will turn a judge into a czar. We have 
always feared the man on horseback in the Presi- 
dency. We have not thought to find the tyrant in 
the judiciary. 

Had our judges borne in mind two ancient rules 
they would not have been trapped into granting 
illegal injunctions in labor disputes. "He who asks 
equity must do equity," and "He who comes into 
equity must come with clean hands " — these they 
have forgotten. 

In the Debs case it was the Government, possess- 
ing the right to proceed criminally or civilly, which 
was the plaintiff, seeking to enjoin an illegal ob- 
struction to the transportation of its mails on the 



n6 Legal Aspect 

public highway. When a private employer comes 
into a court of equity upon the ostensible ground 
of asking its aid against a wrongful onslaught on his 
"property," but for the real purpose of getting the 
court to break up a strike, let the judge *remember 
to inquire whether the employer comes with clean 
hands, and whether he has acted equitably toward 
his employees in the quarrel which resulted in the 
strike. 

If the judges will also remember that in the Debs 
case there was no decision that injunctions are 
proper where the only ground for them is the fail- 
ure of the criminal authorities to do their duty, we 
shall hear no more of government by injunction. A 
large class of our fellow-citizens will not then be able 
to criticise our civil courts for stretching their juris- 
diction so as unduly to favor the "rights of prop- 
erty" at the expense of the "rights of men." It is 
public opinion which must call a halt on our courts. 
The drift in them now is in favor of "property." The 
fault is not so much in the judges as in the people. 
It is a part of the mad race for material wealth in 
which the American people are just now engaged. 
It is a parcel of the "strenuous life " so encouraged 
by high authority. The drift can be stopped. 
In fact, I see signs that the far-sighted among our 
judges are beginning to realize the danger and are 
doing what they can to arrest it. And so, my an- 
swer is that labor unions, if incorporated, may in 
time expect to receive fair treatment in the 
courts. 
^ May I say a word as to the expediency of their in- 



John Brooks Leavitt 117 

corporation? It seems to me to be a necessary step 
in the evolution of the moral right of the workman 
in the plant of the work. The incorporation of 
capitalists on such huge scales as now should be met 
by the incorporation of workmen, if the centripetal 
and centrifugal forces in the industrial world are to 
be kept in due equilibrium. Moreover, there is 
much in the position that when labor unions seek to 
control the labor market as completely as the capi- 
talists are aiming to control the market for pro- 
ducts, the one set, like the other, should be sobered 
in possession of great power by the subjection of 
their property to payment of damages for breaches 
of contract. Labor unions are highly desirable as- 
sociations, but the weak point in them is that the 
noisy talker too often gets the lead. Incorporated 
unions, possessing property amenable to the process 
of the courts, will not for long submit to be led by 
demagogues or unwise men. 

In closing, permit me to add that in speaking so 
freely about the courts the excuse should be urged 
that the violence of infuriated strikers is very apt to 
disturb the equilibrium even of a calm judicial 
mind. When they throw a living being into a red- 
hot furnace, as was the case with an acquaintance of 
my own, it is not matter for wonder, nor for very 
severe castigation, if a horrified citizen should be 
impelled to take advantage of his judicial station 
and exert a power of command, even though it was 
given to him for other purposes. Nor is it strange 
that public opinion will support the judge rather 
than the murderer. Inter arma leges silent. 



nS Legal Aspect 

If the labor unions wish to influence public 
opinion they must restrain and punish wicked acts 
by their own members. Whenever a union will ex- 
pel a member for violence it will gain a hearing from 
the public. 



LEGAL ASPECT 
The Many and the Few 1 
by john de witt warner 

ORGANIZATIONS of capital into trusts and 
of labor into unions have certain common 
features. In each case the object is to wield the 
power and the inertia of the mass as an aggregate — 
to substitute the effectiveness of an army for the im- 
potence of a mob. 

For most effective production(including transport) 
of wealth capital must be highly organized in great 
aggregates; and the opportunities for this and ad- 
vantages of it have of late greatly increased. For 
most effective distribution of wealth produced — that 
is, apportionment among producers — experience has 
shown that wage-earners' unions are necessary. 

If labor is not combined, capitalists have it at 
their mercy — the weakness or necessity of some 
laborers constantly enlisting them against their fel- 
lows in their efforts to secure fairness in distribution 

1 While this article is general in that it discusses all the questions 
proposed, it has seemed better to include it under this section as from 
a lawyer, and as answering from a legal standpoint certain of the 
questions raised in this section. 

119 



120 Legal Aspect 

of wealth produced. If labor is combined, it has the 
world at its mercy; for capital can scarcely exist, 
either for use or advantage, except through labor of 
others than its owners. 

The interests of capital cannot be safely intrusted 
to labor, nor can those of labor be safely intrusted 
to capital. Not because either is actually inhuman, 
or intentionally unfair, but because neither, gener- 
ally speaking, fully understands the other. Labor 
is ordinarily not competent to administer capital, or 
to apportion its own product; and capital still less 
appreciates or knows the human conditions on which 
depends the welfare of labor. And neither can be 
safely trusted to do what it does not know how to 
do. ' 

We have the world's experience behind us. 
Every combine of wealth that was successful enough 
to get control of labor has started in or degenerated 
into oppression of labor, and has grown less capable 
of being fair or businesslike, until it had to be swept 
aside as an obstacle to progress. On the other hand, 
every successful combine of labor by which, on the 
whole, the share of the wage-earner in his product 
has been increased, has bettered his country and the 
race, and almost uniformly increased the ultimate 
returns to capital in the product most directly 
affected. 

The general tendency of wealth in power has al- 
ways been to degrade labor; that of labor in power 
to protect and respect wealth. It is the wage-earn- 
ers of our country whose protection gives value to 
the wealth of our trust capitalists. In short, the few 



John De Witt Warner 121 

are more safe in the hands of the many than are the 
many in the hands of the few. And this is because 
the many are the many — whose weal is the common 
weal — and the few are the few — whose weal is not 
necessarily the common weal. 

The common prosperity of all — the mass of our 
people — is the only condition on which labor can 
prosper. But deprivation and degradation of the 
masses, so long as they will suffer them, is entirely 
consistent with the present prosperity of a few 
whose greed in seizing a large share of wealth pro- 
duced may leave too little for their fellows. It is true 
that in the long run the interests of capital and labor 
are identical. It is equally true that in the long run 
virtue is its own reward, that inherited wealth op- 
presses the heir, and that selfish gain hurts the get- 
ter. But it is only in the very long run — too long 
much to affect our acts— that this is true. If, there- 
fore, capital and labor are to war, whatever be the 
merits separately considered in any one or another 
engagement, the safety of our institutions, the pros- 
perity of our country, and the interests of humanity 
require that labor conquer in the end. 

Socialism and Plutocracy. — "Do you favor 
socialism?" This is, perhaps, not an unfair ques- 
tion ; but it is pointless unless asked by one who 
can answer that other one: "Do you favor plutoc- 
racy?" All civilization is the valuable product of 
socialism, winnowed by the winds of the past — 
small indeed compared with the chaff blown out in 
the process, but all that we have of progress. As 
for government by the few, whatever may have 



122 Legal Aspect 

been its apparent or temporary success, it has con- 
stantly had to be cleared out from the path of our 
race. 

On the whole we are gaining. Intelligent labor no 
longer dreams of Utopia. Intelligent capital more 
and more appreciates the limitations of its power. 
The panacea — and I believe there is one for the 
troubles referred to — is better acquaintance between 
capital and labor — a broader outlook for each. If 
capital better appreciated the- lives and aspirations 
of labor, the lessening brutalities of wealth would be 
rarer still. If labor appreciated the burdens and 
anxieties of capital, the rare excesses of labor would 
disappear. 

This state of things is fast coming about. Labor 
has always had the power to run the world, pro- 
vided it knew how; but until lately it not merely 
did not know how, but could not learn how. It is 
less than a century since the great mass of labor in 
civilized countries went to bed hungry most eve- 
nings. It is less than twenty-five years that it has 
had leisure after work and sleep to think and learn. 
And this is no fault of wealth. 

Until late invention increased control of natural 
forces, the world's product was not enough, how- 
ever shared, to do much more than it did. Now, 
in this and other civilized countries, labor is suffi- 
ciently well nourished to be mentally sound, and 
has enough leisure to consider what it knows, and 
shares the swiftly increasing facilities for knowing 
more, which, for all time until lately, had been al- 
most exclusively those of capital. Therefore, while 



: 



John De Witt Warner 123 

capital will still grow more powerful, because more 
intelligent, the power of labor will much more rap- 
idly increase, until this and every other country will 
be ruled by labor — and better ruled than now, be- 
cause with more intelligent regard for the interests 
of the masses of its citizens; which will ever tend to 
become more nearly identical with those of wealth 
as then distributed. 

Trusts and Labor Unions. — Trust methods 
are in the way, because in essence they are an ap- 
peal to force. And labor-union methods are sub- 
ject to the same criticism. No country can thrive 
with its people warring against each other. But war 
is often the only way to decide what motives shall 
dominate. Organization of capital has always been 
further advanced than that of labor. That labor is 
learning more effectively to organize is a sign of the 
times — a good sign. If, indeed, it means more 
strenuous war, it means the nearer approach of the 
only lasting peace — when labor (the masses) shall 
have conquered its own — a world in which capital 
will be more safe and better rewarded than ever 
before. 

If capital had not learned much of late as to the 
rights and interests of labor, its present domina- 
tion would be far more deadly than- it is. Until 
labor shall have learned more than it now knows of 
the rights and interests of capital, it would hurt both 
labor and capital to give labor full control. No on- 
looker can assume to judge in each instance whose 
is the right in the pitched battle he sees. Still less 
can he fairly ask the combatants not to fight it out, 



124 Legal Aspect 

or to refrain from every means that is fair in war. 
But to succeed even in war each must carefully study 
the enemy's position. And those now engaged in 
war at all other times, and others at all times, can 
and should, by increase of mutual acquaintance with 
each other's interests, and regard for them, more 
and more prevent war. 

Specific Questions. — As to the specific ques- 
tions: 

I see no reason to fear that labor unions if in- 
corporated would not receive fair treatment from the 
courts. But I fear no solution is thus afforded for 
wage and other questions now most mooted. The 
trouble, it seems to me, is this: In questions be- 
tween labor and capital that would require litigation, 
the issues are of endurance — of war. To decide 
these, legal methods are inappropriate; and would 
tend to prolong instead of shorten contests, in 
which, as delay lengthens, flesh and blood is at a 
cruel disadvantage when pitted against capital. 

It seems to me that arbitration is a casual ex- 
pedient for settling differences between two parties 
who are at agreement in temper and nearly so in fact 
— not a generally available means by which they can 
be brought to that point. 

Labor's proper share in the joint product of labor 
and capital will constantly more nearly approach the 
whole in proportion as the increasing protection of 
capital by labor shall lessen the element of risk — 
that is, should continually increase. 

As to the rights of employees in the plants they 
have helped create, if these include the means by 



John De Witt Warner 125 

which natural opportunities are monopolized, these 
should be and will become the property of the com- 
munity — that is, ever more largely labor's own. 

As to model industries, profit sharing, etc., the 
field for successful experiment in these is narrow, 
but will steadily expando 

As to socialism : There is no gulf wider than that 
between the old socialism, which restricted men, 
and the new socialism, which proposes to increase 
the facilities of each to do as he pleases. 

As to the single tax: Its principles — that proper 
use is the only excuse for exclusive possession of 
land ; that the value of that possession is something 
for which the community that created such value 
should always be paid; and that not until the com- 
munity has collected and spent its own income 
should it tax its citizens — once conceded, as it seems 
to me they must be, the only question is: On what 
terms and in what shape can this adjustment best be 
brought about? 

As to the right to work — that is, the opportunity 
to earn one's living — a man refused this right is 
under no moral restraint from taking what he 
needs. Society, having made him an outlaw, cannot 
complain. 

As to free trade, that is the natural right of every 
man. Protective tariffs are extortion, to which no 
one has the right to submit, except because, and in 
so far as, he cannot help himself. 



\ 



PART IV 

ARBITRATION 

a. General Plea for Arbitration. 

b. Is Compulsory Arbitration, Enforced by Law, 

Desirable, and, if so, under what Conditions? 

c. How can Voluntary Arbitration, in Case of Labor 

Disputes, be Made Effective? 



127 



ARBITRATION 



Potter. The industrial revolution — Present intelligent interest — 
Sympathy and co-operation — Interests of labor and capital one 
and the same — Educational value of labor unions — Their self- 
control and moderation — Voluntary mediation and arbitration. 

Gibbons. Arbitration to avoid war of nations — Arbitration for 
industrial disputes. 

Reed. Difference between conciliation and arbitration — Methods 
of Massachusetts Board of Conciliation — Effort to promote 
trade agreements — Submission to arbitration only in last re- 
sort — Organization of employers and employed promotes agree- 
ment — Ultimate result, proper courts of arbitration. 

Wright. Strike and lockout statistics — New Zealand experience 
of compulsory arbitration inconclusive — Compulsory arbitra- 
tion would destroy labor unions — A most serious calamity to 
business — Possibly applicable to common carriers — No satis- 
factory method of applying it yet found. 

McMACKlN. Need of religious and moral principles in business 
relations — Disappointing experience of New York Board of 
Mediation and Arbitration — Increase of trade agreements — 
Compulsory arbitration desirable in quasi-public employments. 

Going. Strong organizations of employers and workmen needed — 

Trade conferences and agreements — England's loss of trade 

through strikes — American industrial supremacy depends on 

harmony of employers and employed. 
.0 

129 



1 3° Arbitration 

COMPULSORY ARBITRATION 



FlELDHOUSE. Consolidations of capital to reduce competition and 
uphold prices — Increasing lack of confidence between laborer 
and capitalist — Just demands of labor unions — History of New 
England textile mills — Injurious competition of Canadian 
laborers— Southern mills — Child labor — Unrestricted hours — 
Need of national court of arbitration — Protective tariff — Re- 
striction of labor immigration — Prohibition of child labor — 
National department of commerce. 

Lloyd. Compulsory arbitration next logical step — Does not inter- 
fere with freedom of employer or employed — Does not endanger 
trade-unions — A safeguard to working men against injustice — 
Protects community at large — Application of ordinary rules of 
law in industrial field also. 

Reno. Industrial justice by industrial courts — Fair wages and fair 
hours — Minimum wage to be fixed by industrial courts — Method 
of appeal and investigation — Irish rent laws — Land courts — 
Powers of investigation and enforcement — Organization and 
power of proposed industrial courts — Middle position between 
voluntary and compulsory arbitration — Penalty imposed only on 
corporate employer — Decisions enforced by courts of justice — 
Present use of injunctions — Prevention of strikes and lockouts. 

Lusk. Origin of compulsory arbitration law of New Zealand — Ac- 
tion of public in self-protection — Opposition of employers and 
employed — Voluntary arbitration inadequate — Board of Con- 
ciliation — Arbitration court with power to penalize employers 
and employed— Conditions in New Zealand different— New 
Zealand view of functions of government — Effort to prevent 
inequalities— Why inapplicable in America — Social inequalities 
— Unbiassed court impossible. 

Clark. Trade conferences with agreement to submit to arbitra- 
tion — Compulsory arbitration against Thirteenth Amendment — 
Against American spirit — Lack of acquaintance of employers 
and employed cause of strikes. 

Mitchell. Trade conferences with trade boards of arbitration — 
Ultimate reference to disinterested umpire chosen by 



Arbitration 131 

latter — National associations of employers and employed de- 
sirable — State boards chiefly valuable for purposes of concilia- 
tion — Compulsory arbitration unenforceable. 

Stahl. Compulsory arbitration unenforceable — Public opinion 
jealous of individual liberty — Would not permit compulsion of 
laborers to work — Public opinion able to enforce decisions of 
voluntary arbitration — Compulsory arbitration not desirable in 
quasi-public employments — Trade conferences and agreements — 
Voluntary arbitration — Strong organizations of employers and 
employed. 

VOLUNTARY ARBITRATION 

SYNOPSIS 

Eidlitz. Apathy of individual members of associations of em- 
ployers and employed — Irresponsibility of labor unions — Lack 
of confidence in their representatives — Permanent joint board 
of arbitration — Members to be elected from both associations — 
Frequent stated meetings — Agreement to submit irreconcileable 
differences to umpire — Too much compromise, too little justice. 

Hoyt. Without recognition of Golden Rule nothing practicable — 
First principle of National Founders' Association — Duty to care 
for interests of employed as well as employer — Injustice to 
workmen cause of distrust of employers — Foundation of trade- 
unionism — Belief that workman does not receive his fair share 
of profit — No thoroughly satisfactory method of arbitration — 
Agreement within trade — Reference to umpire undesirable 
— National organizations and trade boards preferable. 

Douglas. Failure of employers to recognize unions a cause of 
trouble — Results of experience — Only union men employed — In 
case of disagreement conference with officers of union — In last 
resort reference to State board — Times not ripe for compulsory 
arbitration, except, possibly, in quasi-public employments — 
Publicity by State board sufficient compulsion — Incorporation 
of labor unions undesirable. 

HOG AN. Lack of understanding and sympathy between employer 
and employed — Compulsory arbitration unconstitutional — Con- 
trary to American spirit of individualism — National and State 
boards of arbitration of little use — Political reasons — Both em- 



132 Arbitration 



ployer and employed unwilling to submit to outside arbitrators 
— Boards of conciliation within trades only practicable method. 

Fox. Failure of employers to recognize unions — Boards of con- 
ciliation within trades — All compulsory arbitration contrary to 
American spirit — If industry included under one great corpora- 
tion compulsory arbitration perhaps necessary — State boards of 
arbitration useless — Lack confidence of community — Politics — 
Court of compulsory arbitration would not be trusted — Belief 
that it would represent interests of capital. 

Sargent. The time for arbitration — Differences which cannot be 
settled within trades — Agreement to refer to voluntary national 
board of arbitration — Both parties to agree to submit. 



ARBITRATION 

Labor Unions and Arbitration 
by henry codman potter 

IN most of the controversies that divide men, how- 
ever largely they may lean in one direction or 
the other, the equities are not, as a matter of fact, 
all on one side. 

No inequality, no apparent injustice, no disorder 
or disproportion in the relation of men to one an- 
other ever came to pass without there being consid- 
erations on either hand which needed to be taken 
into account. No great evil ever grew up into domi- 
nant place and influence without having, as a part of 
it, certain considerations which, if they did not at 
least in some measure excuse it, must necessarily 
qualify our condemnation of it. In almost all the 
issues which have divided men there has been, in 
other words, something to be said on both sides. It 
is time, I think, that this is frankly recognized. 

There is a time, undoubtedly, for strong and 
vehement speech, and it may be also for extreme 
and, as it may seem to some people, almost revolu- 
tionary modes of action. But such times are those 
when there is, concerning a situation, a tendency, 

133 



134 Arbitration 

a tyranny, of whatever sort, a profound and wide- 
spread apathy, indifference, and heartlessness. But 
in the matter of those great industrial questions 
with which the interests of labor are concerned, the 
case is a very different one. 

There is at present in regard to those questions 
profound and widespread inquiry, a frank acknow- 
ledgment that they involve apparently conflicting 
interests that urgently need readjustment; and 
especially, on the part of dispassionate men, almost 
everywhere in the civilized world — here, in Russia, 
in France, in Great Britain and her colonies, and 
elsewhere — a hearty sympathy with those who are 
striving for such readjustment. 

It cannot, indeed, be denied that it has not always 
been so, and that that tremendous industrial revo- 
lution (it can be described in no more measured 
terms) which has taken place during the century just 
ended, owing mainly to the discovery and adoption 
of mechanical appliances in connection with labor, 
has been carried forward, in many instances, with 
large indifference to the interests of working men 
and women. 

The wonders which mechanical appliances in con- 
nection with manufactures, and indeed with almost 
all forms of industry, have achieved; the greater 
cheapness and the greater consumption which have 
followed upon this; the increased incentives to trade 
and commerce which have been a result of both, — 
these, it must be owned, have dazzled the eyes and 
blinded the judgment of men as to their effects upon 
that which is more precious than machinery, or 



Henry Codman Potter 135 

manufactures, or wealth, or national expansion, and 
that is manhood; and especially to the well-being 
of that vast majority of the race which, under the 
most civilized conditions of life, must always mainly 
earn its bread with its hands. 

"But I do not think that it can any longer be said 
that in regard to these questions there is to-day 
either prevalent apathy or indifference. As to this 
there can hardly be any better evidence than that 
which is afforded by the literature of a generation, 
and of this kind the testimony is ample and con- 
vincing. From Mr. Wyckoff's admirable volume, 
The Workers, all the way up to the most recondite 
discussions of the great questions of demand and 
supply, the range, the variety, the scientific acuteness 
the painstaking candor of what to-day may almost 
be called our industrial literature is at once pro- 
foundly interesting and profoundly inspiring. The 
relations of sociological questions to the life and the 
aims of the working man have enlisted the interest 
and commanded the pens of scholars in both hemi- 
spheres and of the first rank. Their conclusions are 
not, it is true, always identical, which indeed is 
hardly to be expected, but if any one of us has un- 
dertaken to keep abreast of that literature he must 
at least have been impressed with the note of hope 
which thrills through it all. 

We read Mr. Edward Bellamy's Looking Back- 
ward or Equality, and some ardent apostle of the 
rights of man cries out: "Ah, here is the solution 
of all our difficulties, the righting of all our 
wrongs!" If anybody thinks so, let me beg him 



13 6 Arbitration 

to read the calm and temperate, but most conclu- 
sive, volume by Professor George Harris, entitled 
Inequality and Progress, with its clear and quicken- 
ing demonstration of the enormous value, as a 
stimulus to service, as an incentive to sacrifice, as a 
supreme motive for the practical realization of the 
ideal of human brotherhood, of inequalities. 

That thing, which, as I turn my face toward the 
future, seems to be climbing up above the horizon, 
is not any patent, ready-made republic, in which 
almost all liberty of action or of achievement, 
whether in letters, in art, or in the industrial world, 
is taken away from us, and the whole face of human 
society reduced to the dead level of a dreary com- 
monplace; in which men and women everywhere 
shall dress alike, in paper costumes, which will need 
no washing and can be burned up every evening; 
but rather that diviner republic in which he of 
largest gifts will have learnt that his noblest and 
sweetest use of them is not for his own gain or his 
own aggrandizement, but for every weaker, lowlier, 
less endowed brother or sister, who may need to 
have a narrowband sordid life touched with the hand 
of brotherly help and illumined by the light of 
brotherly love ! 

At such a moment, what is our becoming attitude 
with reference to those endeavors and the great 
questions with which they are concerned? Surely, 
first and last, and all the time, one of hearty sym- 
pathy and co-operation. 

The attitude of labor in our generation has not 
always been a wise or a just one toward its best 



Henry Codman Potter 137 

friends. The class feeling among us, which is often 
as strong on the one side as on the other, has more 
than once made the sons of labor distrust and an- 
tagonize every man or woman who was not in all re- 
spects identical with themselves. It has not been 
recognized that in the final view of the great ques- 
tions that have divided labor and capital, their in- 
terests are not antagonistic, but one and the same. 

The final statement in the whole business is sim- 
ply and bluntly this — that neither one of them can 
do without the other. Capital can paralyze labor 
by withholding itself from it; but the process by 
which it does so paralyzes capital as absolutely and 
as utterly as it does labor. In spite of what fierce 
voices on the one side or the other are fond of 
shouting, it is not a question which of the two shall 
be "on top." Neither can be on top — healthfully, 
fruitfully, or permanently. There is absolutely 
only one relation which they can sanely sustain to 
one another, and that is, they must walk hand in 
hand. 

It is because they have helped to teach us this les- 
son that modern civilization may well thank God — 
however impatient capitalists or the public may from 
time to time have been of them — for trade-unions. 
As against sporadic, disorganized, intermittent, and 
individualistic endeavors of the friends of labor seek- 
ing to promote fair dealing and to secure justice, 
the trade-union movement has stood for that great 
principle which subordinates minor differences for 
the greater good of all. It has seized and, on the 
whole, ably utilized, the vast force of organization 



138 Arbitration 

and centralized authority, and it has helped other 
men to realize, whether their strength was capital or 
cleverness, that the organized working force of the 
country was something seriously to reckon with. 

In the conferences, controversies, and collisions of 
the two great forces that have so often stood over 
against each other, there have been some things on 
both sides to regret, but not without recognizing 
that from even the most serious collisions valuable 
lessons are to be drawn. One of them is that brute 
force is the poorest of all arguments to be addressed 
to a reasoning being, whether it consists in one man's 
shutting a shop door in another man's face, or in 
the other man's breaking the skull of a "scab" 
with a brickbat or a club. Such methods are away 
down at the bottom, in the reckoning of a civilized, 
much more of a Christian people, and I trust that 
we shall be content to let them stay there. 

On the other hand, those other methods which 
have been growing in favor among us lately, such, 
e. g., as impartial mediation and arbitration, on both 
sides wholly voluntary, have increasingly demon- 
strated their value. 

As I have said more than once, in all such arbitra- 
tions of which I have any personal knowledge, 
working men and the representatives of working 
men (have shone by virtue of their self-restraint, 
their patient courtesy, their love of fair dealing, 
their open-mindedness to a just argument, their 
cheerful readiness to meet concession with conces- 
sion, and their disposition to make a bridge over 
which order and harmony might pass, quite as much 



Henry Codman Potter 139 

by what they surrendered as by what they claimed. 
I do not say that it has always been so; I only 
speak of what I myself have seen and known ; but I 
am persuaded that the time may not be far distant 
when everywhere it shall be so, in larger and larger 
degree, with more and more happy and substantial 
results. 

For such ends let us all strive, and may God 
hasten their coming! 



ARBITRATION 

National and Industrial Arbitration 1 
by james cardinal gibbons 

CHRISTIANITY has created and is daily de- 
veloping international law throughout the 
civilized world. Courts of arbitration are growing 
in favor among Christian nations. Alexander VI. 
was chosen by Portugal and Spain to arbitrate re- 
garding their respective claims to the newly discov- 
ered territory in the Western World. The decision 
of the Pontiff was very probably the means of avert- 
ing a sanguinary and protracted conflict between 
these two rival nations. Instances of arbitration 
are multiplying in our own day. The dispute be- 
tween Germany and Spain in reference to the Caro- 
line Islands was adjusted by Pope Leo XIII. in 
1886. The Samoan difficulty between the United 
States and Germany in 1889 was referred to a 
friendly conference held in Berlin. At the close of 
President Cleveland's administration an arbitration 

1 These views of Cardinal Gibbons were obtained by his kind per- 
mission through a representative of The Independent, and are re- 
printed here by special permission of the Cardinal and of the editor 
of The Independent. 

140 



Cardinal Gibbons 14 1 

treaty between Mexico and the United States was 
signed in Washington. By an act of Congress 
passed in 1888 the President is authorized to invite 
representatives of the Governments of South 
America, Central America, Mexico, and Hayti to 
an international conference in Washington. The 
very first proposition to be discussed has reference 
to the adoption of measures that shall tend to pre- 
serve the peace and promote the prosperity of the 
several American states. 

With the view of promoting the blessing of in- 
ternational concord, a society has been organized 
in this country. It was fitting that Philadelphia 
should be chosen as the seat of this society, for its 
very name signifies brotherly love. Its founder was 
an illustrious member of the Society of Friends, 
whose distinguishing characteristic is aversion to 
strife, and the cultivation of peace and fraternal re- 
lations among mankind. 

In well ordered society the disputes of individuals 
are settled not by recourse to a duel, but to the law. 
Would it not be a blessing to humanity if national 
controversies were composed on the same principle, 
and that the just cause of a nation should be vindi- 
cated by a court of arbitration rather than by an ap- 
peal to arms? Then to rulers, as well as to private 
litigants, could be applied the words: 

Thrice is he armed that hath his quarrel just. 

And this amicable system, while protecting the 
rights of the weak, would not humiliate or wound 
the national pride of the strong, since it does not 



H 2 Arbitration 

attempt to trench on the sovereignty or autonomy 
of any power. 

Let us cherish the hope that the day is not far off 
when the reign of the Prince of Peace will be firmly 
established on the earth, when the spirit of the Gos- 
pel will so far sway the minds and hearts of rulers 
that standing armies will yield to permanent courts 
of arbitration, that contests will be carried on in the 
council-chamber instead of the battlefield, and de- 
cided by the pen instead of the sword. 

Experience has shown that strikes are a drastic, 
and at best a very questionable, remedy for the re- 
dress of the laborer's grievances. They paralyze in- 
dustry, they often foment fierce passions and lead 
to the destruction of property, and, above all, they 
result in inflicting grievous injury on the laborer 
himself by keeping him in enforced idleness, during 
which his mind is clouded by discontent while 
brooding over his situation, and his family not infre- 
quently suffers from the want of even the necessaries 
of life. 

It would be a vast stride in the interests of peace 
and of the laboring classes if the policy of arbitra- 
tion, which is now gaining favor for the settlement 
of international quarrels, were also availed of for the 
adjustment of disputes between capital and labor. 
Many blessings would result from the adoption of 
this method, for while strikes, as the name implies, 
are aggressive and destructive, arbitration is con- 
ciliatory and constructive; the result in the former 
case is determined by the weight of the purse, in 
the latter by the weight of the argument. 



ARBITRATION 

Conciliation and Arbitration in Massa- 
chusetts 

by warren a. reed 

DEEP in the hearts of mankind, controlling their 
actions, shaping their lives, is a conviction 
that one must be conteated with what is fair. Con- 
fidence in the truth of this proposition is the princi- 
pal thing that we carry with us when our Board goes 
out into the arena where men are striving together. 
I do not mean simply that men will be contented 
with what they think is fair. They have progressed 
farther than that. They have no stomach for con- 
test after they have obtained what fairness, based 
on general opinion, calls for. 

Whoever would step between the disputants as 
mediator must approach his duty with the convic- 
tion that each will be satisfied with the fair thing. 
He must profoundly believe it. Even the most 
settled conviction that men only want what is fair is 
liable to shipwreck when one comes into the pres- 
ence of the angry battle for supremacy, where each 
is endeavoring to destroy the other by any means 

M3 



H4 Arbitration 

within his power. Then men seem to strive only 
for victory and to plan the blow which will cripple 
the adversary, if not destroy him. 

All life is made up of contest. Our lives are a 
struggle against forces which oppose us and which 
we are endeavoring continually to overcome. This 
holds in the industrial world as in every other de- 
partment of life. When one feels that he has come 
up against an opposing force he instinctively pushes 
ahead to meet and overcome the difficulty. If it is 
a matter of dispute between employer and employee, 
his attitude in no way differs from that toward ob- 
stacles of the various other sorts that it is his daily 
lot to meet. He summons his forces to put aside 
the difficulty or surmount the obstacle. He clears 
decks for battle. He feels that he must rely on his 
own right arm. He resolves to trust himself. Then, 
more than at any other time, his nature abhors the 
thought of allowing the matter to pass beyond his 
control by submitting it to an outsider. He pro- 
poses to win, he has nothing to arbitrate. This is 
human nature in the presence of difficulties, indus- 
trial as well as any other. We harden ourselves for 
the struggle. 

Now, arbitration, or the submission of controver- 
sies to a third party, does not look to a change of 
human nature, or expect that the struggle of life 
will be either softened or abrogated as to industrial 
troubles. Its advocate does not expect that men 
preparing for a struggle will suddenly and without 
reason drop their differences in the lap of the arbi- 
trator. But it does rely on the knowledge that all 



Warren A. Reed 145 

men, when they begin a controversy, weigh the 
power of their opponent, and if they find themselves 
matched, or likely to be worsted, will listen to the 
advice of the Duke in Shakespeare's play: "Let 
your reason with your choler question what it is 
you go about." 

To run one's hand over the muscles of an oppo- 
nent often has a peaceful effect and tends to allay 
the belligerent feeling. Arbitration will be a sub- 
stitute for war when each has a wholesome respect 
for the fighting power of the other, and when each 
can see that defeat and rout are about as likely to 
come as victory. If a man is reasonably sure, how- 
ever, of obtaining his end without loss to himself he 
will have nothing to arbitrate. 

We did not arbitrate the Alabama Claims with 
England because of any particular regard that we 
held for her. The feeling here was rather intense 
indignation. England was inclined to scorn our 
claim, but willing to arbitrate because she knew that 
she would get hurt if she did not do so. Each knew 
that the other was a powerful nation and would de- 
liver a heavy blow. We find the same thing to-day. 
It is the battle-scarred union that is willing to sub- 
mit its differences. It is the veteran employer, not 
necessarily in years, but in experience in labor diffi- 
culties, who is willing to let the points in issue pass 
under the judgment of an impartial tribunal. 

Unorganized labor, the new union, the employer 
who, though old in years, first meets a labor trouble 
and who has not learned that "war is hell," — such do 
not need arbitration. They believe that they can 



146 Arbitration 

win out, and are quite sure to have nothing to arbi- 
trate. In proportion as the contestants learn to 
respect the ability of the opponent to inflict injury 
and appreciate that victories are expensive, they 
will be willing to arbitrate, provided, of course, they 
have confidence in the tribunal proposed. 

We have no issue with those who believe that the 
world is growing better. The most beautiful thing 
in life to-day is the developed appreciation of the 
doctrine that it is better to give than to receive. 
Undoubtedly, also, the Golden Rule is the principle 
of action of the lives of more men and women to- 
day than ever before, but the arbitrator in his walks 
does not meet those people often. As we see it, 
life is a struggle for supremacy. 

Before I speak of the methods pursued by our 
Board, I wish to call attention to the different uses 
of the term ''arbitration " now in vogue. Although 
the difference between arbitration and conciliation 
is carefully observed in the act of the Legislature 
creating the Board, still in the popular mind the 
two are often confounded. While the word really 
means a submission by the parties to a controversy 
to a third party for a decision, it has come to mean, 
in a popular way, any substitute for open warfare. 
It not only includes, in the minds of many, media- 
tion and conciliation by a third party, where there 
is no submission to his decision, but it is also made 
to include negotiation by the parties themselves 
without the assistance of a mediator where they 
confer together before open hostilities are com- 
menced. 



Warren A. Reed 147 

The grievance committee of the union is often 
spoken of as an arbitration committee, whose duties 
are to meet a committee from the other side before 
ordering a strike. The work of the arbitration com- 
mittee is often considered complete when it reports 
back to the union its inability to settle with the em- 
ployer, and a strike is often ordered thereupon 
without any further attempt at arbitration. I am 
inclined to think that it is in this sense of the word 
that many unions understand their provision that 
they are favorable to arbitration, and that many of 
the younger unions would be loath to submit their 
grievances to arbitration, properly so-called, after 
an ineffectual negotiation with the employer. 

It is true, however, I think, that the older and 
stronger unions understand the word in its true 
meaning and are committed to its support. Under 
our law arbitration is purely voluntary, and is possi- 
ble only while the relation of employer and employee 
is unbroken and the men are at work. The State 
does not provide for a submission when a strike or 
lockout exists. If one has taken place the men 
must go back to work before arbitration can be en- 
tered upon. In cases of pure arbitration, we have 
the following provision as. to expert assistants: 

" Each of the parties to the controversy, the employer on 
the one side and the employees interested on the other 
side, may in writing nominate, and the Board may ap- 
point, one person to act in the case as expert assistant 
to the Board. The two persons so appointed shall be 
skilled in and conversant with the business or trade con- 
cerning which the dispute has arisen. It shall be their 



148 Arbitration 

duty, under the direction of the Board, to obtain and 
report to the Board information concerning the wages 
paid and the methods and grades of work prevailing in 
manufacturing establishments within the commonwealth 
of a character similar to that in which the matters in 
dispute have arisen." 

In the great majority of cases arbitration is not 
resorted to, but the other function of the Board is 
called into play, that is, conciliation, which is an en- 
deavor to obtain a conference between the parties 
for the purpose of a settlement of their affairs, with 
such assistance from the Board as they may desire 
or it thinks best to render. Let me give you a leaf 
out of our daily life. A newspaper clipping bureau 
furnishes us each day with clippings of all labor diffi- 
culties reported in the newspapers in the State dur- 
ing the preceding day. Each case is docketed as it 
comes in, in a docket which has the following 
headings: City or Town, Employer, Nature of 
Business, Date of Strike or Lockout; Cause, Num- 
ber Out, Union Involved, Result. 

At each meeting of the Board unsettled cases are 
discussed in their order. As soon as a case of any 
importance presents itself we visit the locality, ob- 
tain personal interviews with the parties, hear their 
stories, and offer suggestions which look generally to 
a conference at that time or later, according to the 
temper of the parties. 

Personal contact with each of the parties, patient, 
unceasing endeavor (in spite of all obstacles and in 
the face of discouraging failures), is the price of suc- 
cess in bringing the parties together. After the 



Warren A. Reed 149 

first suspicions are allayed, suspicions that the 
other party has been instrumental in bringing 
the Board into action, both sides uniformly receive 
us with courtesy and are willing to give us an 
audience. It is remarkable to what a degree men 
are softened by suggestions when they have con- 
fidence in the fairness of the maker of them. In 
many cases, when we have won the confidence of 
both sides, we are in a position to weaken the 
animosities and bring the parties nearer together. 
Unless some question of principle, real or fancied, 
intervenes, they will come quite together. 

One department of the work of the Board I desire 
especially to mention, because it seems to us the 
most interesting. We endeavor to bring about be- 
tween employer and employee, under our super- 
vision, trade agreements which settle the main 
points of interest to them and which contain a 
clause binding them, in case they shall be unable in 
the future to settle their differences amicably, to 
submit, without a strike or lockout, their differences 
to arbitration by the State Board, or a local or joint 
board if they prefer it. What we can do along these 
lines is clear gain and lays the foundation, before 
controversies arise, for a fair and equitable disposi- 
tion of them. Not infrequently our rooms present 
the pleasant picture of a meeting of committees of 
associations of employers with committees of the 
employed, or their representatives, who are honestly 
and earnestly looking for a peaceful solution of their 
troubles. 

"To climb steep hills requires slow pace at first," 



150 Arbitration 

but we believe that we have begun to climb the hill 
when we have induced parties to agree beforehand 
to waive the battle and submit to the decision of a 
tribunal of their own choosing. We notice that at 
present such trade agreements are only possible 
where both sides have had their fill of fighting. It 
will be long before such understandings will be gen- 
eral, but we believe that as time goes on, and as 
men slowly learn that even the victor suffers greatly 
in industrial warfare, they will tend to come to a 
peaceful agreement to avoid the struggle. More 
hopeful still is the attitude of both contestants 
when, without the aid of the Board, they enter into 
a compact that, without a strike or lockout, they 
will submit all their differences to the State Board 
or to a local or joint board. This movement is 
meeting with considerable favor among some of our 
manufacturers and their employees in Massachu- 
setts, and, as far as we know, is considered by them 
as a solution of the labor problem. It is needless to 
say that we foster such arrangements. 

We do not dread the increasing power of both 
sides, and their increasing ability to do each other 
harm. The probability is not that one will over- 
come the other, but rather that each, out of respect 
for the strength of the other, will have a sufficient 
regard for his own safety to avoid the battle. In a 
certain sense the industrial world seems to be in a 
preparatory stage in this matter and to be busied 
about certain preliminary questions. When these 
have been worked out the field for arbitration will 
be more apparent. 



Warren A. Reed 151 

The legal right of men to combine, though long 
disputed, is now freely and fully admitted. And 
yet very many employees have the same feelings of 
hostility to combinations that once led the com- 
munity to pass statutes against them. Capital is 
turning all its energies toward production, and only 
gives a thought to the labor question when brought 
up against it. It is often inclined to repress organi- 
zation among employees and to oppose it on general 
principles, although it is obliged to concede the full 
right of the other party before the law. Time will 
bring about a better feeling on this subject, we 
may hope, now that the first and most difficult step 
has been taken. At present it is certain that the 
uncompromising attitude of the parties on this issue 
of organization is a leading cause of keeping up the 
trials of endurance which it is the object of arbitra- 
tion to supplant. 

It seems not unreasonable to expect when such 
questions as these have dragged their slow length 
along, and are finally disposed of, settled forever, 
that mankind will turn from the trial by the ordeal 
and accept a more reasonable settlement in indus- 
trial quarrels as they did in the thirteenth century in 
the other quarrels of ordinary life. It is a long time 
since the Anglo-Saxon settled a question of the title 
to a piece of land by the trial by battle or duel be- 
tween the parties, but it was also a long time before 
the jury supplanted this barbarous custom. 

One may read in Glanville, the author, in about 
the year 1200, of our first English law treatise, an 
encomium upon the jury system, which was then 



15 2 Arbitration 

displacing the duel. ''It, the jury system, so well 
cares for the life and condition of men that every one 
may keep his rightful freehold and yet avoid the 
doubtful chance of the duel, and escape that last 
penalty, an unexpected and untimely death." 

In this contest the question of what is a fair day's 
pay is often settled by a trial by ordeal, so to speak, 
to see whether a man or machine can go the longer 
without food, and the process is about as satisfac- 
tory as the ancient custom was. When the parties 
appreciate the danger of this mode of settlement of 
honest differences, they will look more sharply than 
at present for a substitute. In the meantime it is 
the office of boards, by education, by patient en- 
deavor, by conciliation, and by courting the confi- 
dence of both sides, to prepare the way. As for us, 
we are looking steadfastly to the future. We have 
"hitched our wagon to a star." 

What system will be established and when no man 
can tell. Sometimes it seems as though some sys- 
tem was about to be quite generally adopted, and 
again it is as far away as ever. International and in- 
dustrial arbitration seem to go hand in hand. One 
day nations are ready to agree that international dif- 
ferences should be arbitrated, and the next they leave 
an order with Krupp. It is perhaps enough to say 
that the establishment of some means of amicably 
settling differences is in the line of human progress, 
and for that reason alone deserves the best thought 
of us all. 



ARBITRATION 

Objections to Compulsory Arbitration 

by carroll d. wright 

SOCIETY is directly and indirectly interested in 
securing industrial peace. 

The record of strikes in the United States for the 
twenty years ending December 31, 1900, as shown 
by the United States Department of Labor, would 
seem to indicate that at times, at least, some drastic 
measure for the prevention of conflicts might be de- 
sirable. This record is that during the period 
named there were 22,793 strikes, with a wage loss of 
$257,863,478, a loss through assistance rendered by 
labor organizations of $16,174,793, and a loss to 
employers of $122,731,121. The lockouts during 
the same period numbered 1005, with a wage loss 
to employees of $48,819,745, a loss through assist- 
ance rendered by labor organizations of $3,451,461, 
and a loss to employers of $19,927,983. The total 
losses by strikes and lockouts reached the vast sum 
of $468,968,581. 

It is curious to note that in 50.77 per cent, of the 
establishments in which strikes occurred, they were 
successful, in 13.04 per cent, partially successful, 

153 



154 Arbitration 

and in 36.19 per cent, failures. In 50.79 per cent, 
of the establishments where lockouts were ordered 
success attended the efforts of the employers, while 
in 6.28 per cent, they were partially successful, and 
in 42.93 per cent, the lockouts failed of the object 
for which they were ordered. 

In a large majority of all these strikes and lock- 
outs the public as such probably experienced little 
or no inconvenience, and, therefore, was not sensi- 
tively interested in them, but in others, and those 
of the greatest magnitude, the loss cannot be com- 
puted by any statistical method. It is utterly im- 
possible to ascertain the direct and indirect loss to 
the public through great strikes and lockouts which 
suspend traffic, raise prices, and affect all trade and 
commercial transactions. 

It is when these great strikes with far-reaching in- 
fluences are on that the suggestion comes very 
forcibly from various quarters that some compulsory 
method of preventing or settling them promptly 
should be inaugurated. The principles of what is 
known as compulsory arbitration have not, however, 
secured very widespread influence in the United 
States and in other countries largely devoted to 
mechanical production; they have been adopted in 
New Zealand, where the industries are still small 
and are in their growing period. of inception. The 
idea, nevertheless, is receiving increased attention 
and even approval here in this country, and it is 
worth while to inquire whether its adoption is de- 
sirable, and if so, under what conditions. 

It should be remembered that in the last analysis 



Carroll D. Wright 155 

every effort of the law-making power to adjust in- 
dustrial difficulties is a practical declaration on the 
part of society to employers and employees that if 
they are not able to conduct their affairs in such a 
way as to relieve society of annoyance, it proposes, 
directly or indirectly, and in some degree, to take 
charge of those affairs. Whenever a board of arbi- 
tration before which the parties involved can come 
of their own volition is established, it is in a degree 
an announcement of the intention of society to in- 
terfere to protect itself from the complications aris- 
ing from strikes and lockouts. Hence the whole 
subject must be viewed very largely from the stand- 
point of the public's interest, for if compulsory 
arbitration is ever justifiable it is only when it is es- 
sential to prevent industrial warfare, that society 
may not suffer. 
/ The experience of New Zealand is giving some 
impetus to the doctrine of compulsory arbitration, 
but the fact is, the experience of New Zealand can- 
not be taken in any sense as a measure of what 
should be established in the United States. The 
industries of New Zealand are small and, as has 
been stated, in their period of inception, while in 
the United States industry is organized on a large 
scale, with vast capital involved, large industrial 
armies employed, and the conditions of distance, of 
transportation, of cost, and of marketing entirely at 
variance with the conditions existing in New Zea- 
land. /The employers of New Zealand have been 
quite content to accept the decrees of the court in a 
majority of instances where compulsory arbitration 



156 Arbitration 

has been applied. The labor organizations, on their 
part, have been quite as content. This is because 
of the peculiar conditions existing. But compulsory 
arbitration has not yet been tested in New Zealand. 
The test will come when one of the parties declines 
for economic reasons to abide by the decision of the 
Court of Arbitration. The experience of New Zea- 
land, therefore, ought to have little or no weight in 
influencing parties in the United States to advocate 
the application of the principles of compulsory arbi- 
tration, the underlying feature of which, as under 
any compulsory method, is and must be that which 
underlies an action at law. 

The antagonisms which nearly always arise be- 
tween the parties engaged in a suit at law are suffi- 
cient at the outset to dampen the ardor of those 
who believe in compulsory arbitration in industrial 
matters. In an ordinary suit, either of tort or of 
contract, the aggrieved party may summon the de- 
fendant into court. The issue is clearly defined by 
the declaration and the answer, and the court has a 
specific point or a number of specific points on 
which to base a decision. 

In an industrial contest the aggrieved party may 
state his demands, and the respondent reply, set- 
ting up his own view of the grievances advanced by 
the petitioner. The court, instead of having a 
clearly defined issue in the contest, must make in- 
vestigations to ascertain which of the parties is in 
the right, and in nearly every case the result must 
be a compromise not fully satisfactory to either 
party, or else an arbitrary decree based on the de- 



Carroll D. Wright 157 

mands of the complainant on the one hand or the 
position of the respondent on the other. 

Such a course would inevitably have the same 
effect as ordinary suits at law — an increased irrita- 
tion and a lasting antagonism — and instead of result- 
ing in bringing employer and employee nearer 
together as time goes on, would drive them farther 
apart and make all efforts at ethical conciliation, and 
consideration even, more and more difficult. 

The matters referred to above, however, are ele- 
mentary. The chief difficulty with compulsory 
arbitration relates to production itself and the 
means by which trade is increased. For instance, 
the employees of a large concern, under the pro- 
cesses of compulsory arbitration, summon their em- 
ployer into court on a demand for an increased rate 
of wages. The court, after investigating the whole 
subject, enters a decree in favor of the petitioners. 
The decree of a court can be executed by the offi- 
cers of the court if they are able; if not, by an in- 
creased force, even to the extent of the employment 
of the military arm of government. Thus the em- 
ployer would be compelled either to pay the in- 
creased rate when economic conditions would not 
permit, or to sacrifice his business, thus throwing the 
petitioning employees out of work. 

On the other hand, suppose the decree was in 
favor of the employer. It could be executed with 
all the force and power of the State, the same as in 
the other instance. Then the employees would be 
obliged to accept the rate of wages decided by the 
decree of the court or take the consequences. These 



158 Arbitration 

consequences would be defined by the law in the 
shape of penalties. 

One can easily see how under some conditions the 
results might be disastrous not only to the men 
themselves, but to the establishment involved. In 
the last analysis, for economic reasons, production 
would be reduced, or at least greatly retarded, and 
concerns would have to go out of business, or else 
adulterate goods, or resort to various other fraudu- 
lent practices in order to continue in business in 
accordance with the court's orders. The results 
might be still more far-reaching and necessitate not 
only what we now know in popular parlance as the 
"Trust," but the assumption by the Government of 
productive industry itself. 

aking another view of compulsory arbitration, it 
would seem that it must inevitably result in the de- 
struction of trade-unions. A union, a party to a 
suit in a compulsory court, must be able to sustain 
the penalty involved for a violation of the decree, 
either in damages, which must be met by a money 
payment, or in the loss of its charter. It is this 
particular condition which makes nearly all labor 
organizations in this country, especially those repre- 
sented in the American Federation of Labor, antag- 
onistic to the inauguration of a system of compulsory 
arbitration. Adverse decisions, the Impossibility of 
obeying decrees or judgments, would mean inevi- 
tably the destruction of the unions involved, and 
ultimately of trade-unionism itself.y^ 

Most men now agree that some form of unionism 
is desirable. The great concerns involved in pro- 



Carroll D. Wright 159 

duction, through combinations, mean necessarily 
the organization of labor. Ten or twenty thousand 
employees cannot be dealt with individually.' 
There must be more and more collective bargaining 
as organization on both sides progresses. Hence the 
destruction of unionism as such would be a disaster 
to industry itself. 

Turning to another side of the question, that of 
transportation, where interstate interests are in- 
volved, it may be conceded at once that the em- 
ployees are in the nature of quasi-public servants, as 
the railroads themselves are quasi-public corpora- 
tions. Some ingenious law may be devised that 
may call for a more thorough obligation on the part 
of the railway companies to perform their duties, 
and on the part of the railway employees to perform 
their duties — an adjustment which shall protect the 
public from the disastrous results of interrupted 
traffic. 

Here may be an opportunity for the application 
of some of the principles of compulsory arbitration, 
but the matter is so delicate that it should be ap- 
proached with great caution and great wisdom. 

Many suggestions have been made during the 
past few years in the direction of making railway 
employees the servants of the public through Gov- 
ernment intervention, putting them relatively in the 
position of enlisted men, or subjecting them to a 
license in such a way that a violation of their con- 
tract with the railway companies should forfeit their 
license. All these measures are compulsory in their 
essential elements; in essence they are such. 



160 Arbitration 

So far, however, no one has seemed to have the 
wisdom to provide for compulsory regulation and 
control of common carriers and their employees 
without at the same time infringing upon the rights 
of the individual; but if compulsory arbitration is 
ever desirable it is desirable only in some degree in 
such employments as affect the real personal con- 
venience of the public itself. 



ARBITRATION 

The Moral Element in Industry 

BY JOHN McMACKIN 

IT is not difficult to set forth theoretically the re- 
lations which should exist between employers 
and employed in a well organized society. The 
social order comprises numerous and varied inter- 
ests, which may be conveniently grouped as re- 
ligious, moral, intellectual, and material. Material 
interests alone form only a fraction of the interests 
affecting society. Hence it is that the social ques- 
tion is not only a question of economics, but espe- 
cially a religious and moral question. The great 
historian of political economy, Professor Ingram, 
assures us that "the only prominent and successful 
adjuster of human relations is religion. Nothing 
else," he adds, "can succeed." 

Unfortunately, in our day employers too fre- 
quently recognize no other obligations but those en- 
forced by law, and are bound to their employees by 
no other tie than the mere contract to pay a stipu- 
lated wage for work performed. Too often, I fear, 
capitalists look upon labor as a mere means of sat- 
isfying cupidity. To-day we are witnessing the 

161 



1 62 Arbitration 

awful consequences of such principles. Leo XIII. 
has described the sad reality with a master hand. 
"Little by little," he writes, "the isolated and un- 
protected workers have found themselves at the 
mercy of inhuman masters and the cupidity of un- 
bridled competition. A small number of the rich 
and opulent monopolize labor and trade and burden 
the great multitude of the proletariat with an almost 
servile yoke." 

Professor Thorold Rogers says that "the necessity 
of the English poor law can be traced distinctively 
back to the crimes of rulers and their agents," and 
he adds that "in a vague way the poor know that 
they have been robbed by the great in the past and 
are stinted now." Cardinal Vaughan, speaking of 
the material and economic condition of the English 
poor, says: 

" In the annual death rate throughout England one in 
fourteen was that of a pauper in the workhouse. In 
Liverpool one death in seven occurred in the workhouse. 
In the Manchester township (before its recent enlarge- 
ment) one death in every five was that of a pauper. 
According to the Royal Commission for Housing the 
Poor, one person in every five in London dies in a public 
hospital or in a workhouse, and if the wealthy classes 
are excluded the number is one in every three. This 
sums up the material condition of the poor in the 
wealthiest country in the world." 

A little reflection will make it evident that the in- 
terests, material and moral, of employers and em- 
ployed are common. These interests affect not 



John McMackin 163 

only the individuals, but the entire social fabric. 
The end of civil society is temporal prosperity, 
which supposes material well-being and a certain 
abundance of wealth. The fruitful and necessary 
source of these material goods is labor, which is so 
fecund in production that it may be considered the 
unique source whence proceeds the wealth of na- 
tions. Besides material interests, labor has also 
moral relations to the social order. All men are 
equal inasmuch as all have needs, and these needs 
cannot be satisfied without the co-operation of the 
different members of human society. 

M. Blondel has written a remarkable work entitled 
U Action, in which he demonstrates with a wealth of 
argument how utterly dependent we remain during 
our entire lives. The intellectual, moral, and ma- 
terial goods of this world are unequally distributed, 
and hence a mutual dependence among men for the 
purpose of attaining their respective wants. This 
leads to a unity of effort which becomes a principle 
of harmony and concord in the social body. Labor 
is thus the necessary complement of all the ele- 
ments that constitute society. The family, author- 
ity, property, are all indispensable elements. Labor 
is the practical realization of social aims, the activity 
of the social organs in exercise. It procures directly 
the particular good of the workman. Indirectly it 
contributes much to the common weal. 

To render these common interests a cause of 
union and not of dissension between employer and 
employed, the former must bear in mind always 
that the workman is not a mere machine, not a mere 



1 64 Arbitration 

material force, but a moral person, an intelligent and 
free cause, a being destined for a spiritual and super- 
natural end. True, the contract entered upon by 
both parties bears directly on the workman's eco- 
nomic ability; but, nevertheless, it cannot and must 
not exclude the other moral and spiritual properties 
indissolubly connected with the physical energies of 
the same moral being. 

Economic production consists in making some 
useful transformation of matter. The capitalist 
furnishes the materials and employs the human en- 
ergy of the laborer to effect the transformation. 
While the intellectual and moral qualities of the 
human agent do not come under the object of the 
contract directly, still, they induce certain moral ob- 
ligations. Human energy is inseparable from the 
nature and person of man, and hence the human 
person comes under the contract indirectly. You 
cannot separate human energy from the human per- 
son any more than you can utilize steam pressure 
without its motor. 

It is a question of justice, and not of humanity or 
charity. The workman is a moral agent. His en- 
tire personality must receive due consideration. 
You cannot prescind from his natural rights and his 
dignity as a man without falling into arbitrariness 
and injustice. If employers and employed have 
mutual interests and would render their mutuality 
effective, they must acknowledge and fulfil their re- 
spective duties. Let the employer respect the dig- 
nity of the workman whom God Himself treats with 
great respect. Workmen, on their part, must fulfil 



John McMackin 165 

faithfully and justly all they have engaged to do; 
they must not injure the employer, either in his per- 
son or in his effects; their demands should be made 
without violence. Permanent relations are main- 
tained by a firm sentiment of reciprocal interests 
and duties. 

Arbitration and Conciliation. — Boards of 
arbitration and courts of conciliation are perhaps 
the principal and most successful methods yet 
adopted for the adjustment of labor disputes. The 
former, as a rule, decide actual, definite grievances, 
while the latter are permanent, take action on all dif- 
ficulties arising between employers and employees, 
and endeavor to prevent strikes by fostering stable 
and kindly relations. Courts of conciliation have 
produced very encouraging results wherever estab- 
lished. 

Voluntary arbitration can only be made success- 
ful through the influence of public opinion and the 
willingness of the two parties to an issue to submit 
to an amicable adjustment of difficulties. It has 
been found in this State that the method of enter- 
ing into annual agreements as to wages and hours 
has been productive of the best results. We have 
had very few strikes in the mechanical trades owing 
to their thorough organization and system of making 
agreements for a specified time. 

The greatest trouble comes from unorganized or 
newly organized bodies of unskilled workers, who 
precipitate strikes without any consideration as to 
their ability to maintain their demand or to the 
idle class ever waiting for employment. They 



1 66 Arbitration 

forget that it is always the idle class that regulate 
the wages in such instances. Without the influence 
of an intelligent public opinion voluntary arbitration 
would not be effective, as neither of the parties to 
the issue seem willing to arbitrate unless they think 
that they cannot enforce their views by strike or 
lockout. 

It is only when the supreme law of justice holds 
sway that we can expect any effective system of vol- 
untary arbitration. It is the denial of this funda- 
mental principle of justice that makes all these 
conditions between employers and employees possi- 
ble and the appeal to arbitration impossible. 

Our own State, through its Board of Mediation 
and Arbitration, settled seventeen strikes and failed 
in fourteen, and fifteen of them were settled by 
other means than through the Board of Mediation; 
so that there were only forty-six out of four hundred 
and fifty-five that were actually treated by the State 
Board of Mediation and Arbitration. This would 
go to show that the natural tendency of men is to 
doubt, whether they have reason or not, and to 
lose confidence in State boards; and then there is 
the other tendency that is growing up among our 
people of arriving at mutual understanding them- 
selves and selecting men of their own choice for 
arbitrators. 

We have had a case where Bishop Henry C. Pot- 
ter, acting as arbitrator in a wage dispute between 
the labor organizations and the employers in the 
marble industry in New York City, rendered a de- 
cision satisfactory to both sides. Since that time 



John McMackin 167 

these unions and the manufacturers have entered 
into periodical agreements. 

The Hon. Seth Low, then President of Columbia 
University, settled by arbitration a strike of printers 
in New York City. President Low has also adjudi- 
cated controversies in other trades. In the case of 
the printers the main point in dispute was recogni- 
tion of the union, and the decision was favorable to 
the union. Mr. Low took the view that if the union 
printers in the employ of the firm at that time were 
in the majority then the whole shop should be union. 
That was the ground on which he rendered his de- 
cision, and the- employer has abided by it ever since. 

I have always believed that in quasi-public em- 
ployments, that is, all businesses conducted by 
virtue of a national or State charter, compulsory 
arbitration would be feasible, because in that case 
the employees could be either registered or licensed 
and made amenable to an arbitration board's de- 
cision. For all general employments the only hope 
of peace is the creation of such a public opinion that 
neither party to a controversy could disregard. In 
the last analysis it is simply a question of recogniz- 
ing the law of justice and acting accordingly. 



ARBITRATION 

Will it Pay? 
by charles buxton going 

WILL it pay?" 
Bald and sordid as the • question may 
sound, it is the vital one for the advocates of arbi- 
tration to answer. Men are gaining a broader com- 
prehension of what is implied by "paying" — are 
learning to look beyond the shop door and the end 
of the working day to see that a man's labor is a 
physical expression of his life, and willnever reach 
its possible maximum of efficiency until his body 
and mind are made and kept as efficient as possible. 
Advanced manufacturers generally are adopting a 
"humanitarian " policy which they would have re- 
jected contemptuously a very few years ago, and 
everywhere is apparent a growing appreciation of 
the necessity of acknowledging the ethical method 
as well as the cosmic in the government of industrial 
works; but this is simply because of the clearer 
vision which has been granted to — or forced upon — 
the world as to what really does "pay." The speci- 
fications are the same; the methods of testing only 
are different. The only demonstration needed to 

168 



Charles Buxton Going 169 

advance the cause of arbitration, then, is that, tried 
by the widely comprehensive tests which the eco- 
nomic world has learned to accept, "it pays" — that, 
in the large, it increases the economy of production. 

It is hardly more than a truism to say that the 
pursuit of economy is the controlling motive in 
modern life — at least on the material side. Econ- 
omy is the quickening power in every movement of 
mechanical progress or industrial advance; it is the 
determining principle in the final ruling upon every 
case brought to the test in the progressive adjudica- 
tion of social and industrial problems. 

Does this system, or that appliance, tend to 
cheapen production and to better the product? 
Then manufacturers may demur and labor may op- 
pose, but the new practice will steadily dispossess 
the old, and in the end triumphantly prove its fit- 
ness by bringing in its train better things than it 
drives before it. This has been proved over and 
over again, and never more strikingly than in the 
century just closed. 

Industrial Revolution.— Methods of dealing 
with almost every phase of productive activity and 
contributory function have been revolutionized, all 
in the interests of greater economy. The whole 
history of the introduction of machinery, of -its 
constant betterment, of its ever-spreading applica- 
tion, of its continual creation of widening fields for 
swarming armies of workers, is one great embodied 
sermon on the same text. 

Prevention of waste,reduction of friction, taking up 
of lost motion, averting of stoppage, concentration 



1 7° Arbitration 

upon actually useful work, the production of more 
results and better results from less effort — these 
are the controlling lines by which the whole struc- 
ture of modern industry is shaped. It is needless, 
except by way of analogy, to recall the bitter 
opposition of short-sighted economists to every 
step of this progress. Sometimes vested interests 
and sometimes laboring classes have been marshalled 
in desperate resistance to apparently impending de- 
struction, and have called upon society to save itself 
from crashing down in the ruin which would surely 
follow the attempt to replace so essential a part of 
its own structure. 

It cannot be pretended that individual hardship 
did not occur, but in the main the new institutions 
were largely modelled from the materials of the old, 
the benefits were immeasurably greater than the 
pains, and it soon became apparent that any suffer- 
ings caused by the changes were trifling compared 
to those which would have followed the attempt to 
maintain an old system no longer adequate to the 
needs of the world. 

And so, ever justifying itself by its results, the 
process of intensification in production has gone 
steadily on in the mechanical world, striving ever 
for the ideal of continuous operation at the maxi- 
mum of economy, and finding, as it comes nearer 
to this ideal, continually rising gains for all — for the 
manufacturer, whose plant produces more units of 
profit-bringing product against a fixed amount of 
maintenance charges; for the operative, whose wage 
rises in proportion to his increased productivity; for 



Charles Buxton Going 171 

the consumer, who buys more and more cheaply 
as competition between sellers forces prices down 
parallel with the falling cost of manufacturing. 

All this is familiar — almost hackneyed. It is sum- 
marized here only because it pictures most visibly 
the economic conditions of the times by which must 
be tested every matter offered for incorporation in 
the industrial system. 

Arbitration and Economy of Production. — 
Will arbitration increase the economy of produc- 
tion? Will it operate to prevent waste, to reduce 
friction, to take up lost motion, to avert stoppage, 
to concentrate effort upon useful work, to produce 
more results and better results from less total effort 
■ — in short, will it tend to yield the maximum of 
serviceable product, with the maximum of satisfac- 
tion, from the minimum of expenditure? 

Can there be any answer to this but an emphatic 
"Yes"? Can there be an3^ feeling but condemna- 
tion mixed with wonder toward a system which in its 
present stage spends exhaustive study in saving a 
fraction of a pound of coal burned under the boiler, 
and wastes unmeasured human energy wrangling 
with the fireman while the costly plant stands idle? 
Which spends unlimited money and brain power 
perfecting machines that can run continuously 
without stoppage for readjustment, and then toler- 
ates weeks of inactivity while struggling over an 
adjustment with the machine tenders? Which 
"scraps" unhesitatingly tens of thousands of dol- 
lars' worth of transmission machinery in favor of a 
newer type giving a higher percentage of efficiency, 



172 Arbitration 

and tolerates the wastage of hundreds of thousands 
in strikes and lockouts, brought on by clinging to 
an antiquated system for transmitting an under- 
standing between employer and employees, which 
system has about as low an efficiency as possible? 

Would any sane board of managers attempt to 
run a railway, or start an electric-lighting plant, or 
operate a mill or factory, or send a liner to sea, with 
a mechanical equipment which was certain to break 
down periodically and lie in inevitable idleness until 
repairs could be patched up? And yet that is al- 
most an absolute analogy to the status of labor con- 
ditions throughout nearly the whole range of such 
enterprises. 

The explanation — at least a large part of the ex- 
planation — lies in the fact that progress has been 
too rapid to be symmetrical, and not unnaturally at- 
tention was directed first to those things which 
could easily be seen, felt, weighed. The physical 
elements of the manufacturing and transportation 
system have almost engrossed attention; the less 
material ones have received comparatively little 
systematic study. 

In fact, there has been a certain tacit acceptance 
of the idea that they were uncontrollable, and that 
salvation in the struggle for supremacy in industry 
was to be found through making the machine so 
perfect that its economy would offset the unavoida- 
ble losses from time to time caused by the unruli- 
ness and irregularity of the man. It is only lately 
and still very imperfectly recognized that there must 
be a fitting of methods of management to methods 



Charles Buxton Going 173 

of manufacturing — that the organization of a great 
work of any kind has more to do with its success or 
failure than its equipment has. 

The idea is spreading slowly; its apostles as yet 
are few, and their preaching is not always heeded. 
But the mechanical triumphs of to-day were won 
against equal scepticism. But a few decades ago it 
was "demonstrated " that no steamer could ever 
cross the Atlantic, because her engines would need 
more coal than she could carry; but a few years ago 
faith in the reliability of steam propulsion was yet 
so weak that sails were still carried. Electric light 
and power have hardly yet shaken off the suspicion 
of being incomprehensible, unreliable, and possibly 
of evil repute. "Machine-made" has still a sug- 
gestion of reproach. But the steamship and the 
dynamo and the machine won their way because 
they performed certain functions better, more 
cheaply, and in the end far more reliably than the 
agencies they displaced. And so will a rational sys- 
tem of adjusting relations between employer and 
employed win its way against the wasteful, discord- 
ant, racking, and wrecking methods now generally 
followed. 

The world is being rapidly aroused to an appreci- 
ation of the hideous wastefulness of war. The cost 
of it is creating a sentiment which the inhumanity 
of it never succeeded in making potent. South 
Africa and the Philippines, it is safe to say, are do- 
ing more to discourage war than all the disarmament 
advocates of the day, with The Hague Confer- 
ence thrown in. But if war is being discredited 



1 74 Arbitration 

politically, it is far more so industrially. We do not 
need to look for an object-lesson. 

An Object-Lesson. — England furnishes an ex- 
ample, full of meaning, of the mutual disaster to 
manufacturers and workmen which comes from the 
fight-to-a-finish method of adjusting labor troubles. 
It was perhaps the first instance large enough in 
proportions and clear-cut enough in its setting to 
be easily studied and correctly estimated. Most 
labor wars have been (broadly speaking) local, and 
while tolerably accurate figures of their cost have 
been presented afterward by statisticians, no graphic 
representation of the effects was possible; standards 
of comparison were confused by similar troubles 
elsewhere in the country; comparisons with other 
countries were impracticable on account of national 
differences of conditions. But in England, in 1897, 
the entire engineering trades, including practically 
all the mechanical industries which furnish the bulk 
of her export manufactures, became involved in a 
general strike and lockout, which was fought to its 
finish in January, 1898. The scale of operations was 
national ; the measure of consequences, owing to the 
late rapid extension of competition in engineering 
work, was international. Labor and capital were 
both more thoroughly organized than ever before. 
The struggle was comparatively free from local vio- 
lence, destruction of property, or direct physical 
loss. The ''treaty of peace " seems to possess the 
elements of justice and common-sense. Under it, 
according to an eminent British authority, work has 
since proceeded "with very great freedom from dis- 



Charles Buxton Going 175 

putes compared to any other period when there was 
an equal demand for labor." 

This seems to be a result worth fighting for. 
What, then, is the "object-lesson "? What was the 
loss which should deter any other land from the ap- 
peal to force in settling labor questions? 

Simply this: That in that year of stubborn idle- 
ness England lost trade which she is likely never to 
regain ; that since then, and largely because of the 
foothold in English markets gained during that 
time, the United States have passed England in the 
race for first place as an exporting country — a place 
which England had held so secure and by so long a 
lead that she considered it was "England first, the 
rest of the world nowhere." The price she paid for 
an archaic method of settling industrial disturbances 
was an apparently permanent reduction in the vol- 
ume of her vitally important export trade. 

This is a matter which comes closely home to the 
United States. A very great proportion of the 
present prosperity of our country, especially in 
the iron and steel trades, machine, tool.trades, and 
metal-working industries generally, is due to suc- 
cess in securing orders in foreign countries. Our 
gains in this direction have been won largely by 
higher adaptations of mechanical equipment and 
works-organization, and by fuller accord and co- 
operation between employers and workmen in 
advancing economy of production; but the deter- 
mining impulse was given when England, the long 
recognized workshop of the world, stood idle and 
helpless to fill the orders of her patrons because her 



1 76 Arbitration 

entire industrial machinery was stalled and dead- 
locked, trying to smash to pieces an obstruction 
which, with a wiser policy ruling, might have been 
removed without stoppage. 

While British masters and men clinched and 
struggled their customers went "across the way." 
And, as I wrote in the Engineering Magazine in 
May of 1 900: 

" Trade, forced into new channels, is often loath to re- 
turn to the old ones. America was a permanent gainer 
by the long-protracted British engineering strike. She 
would be a permanent loser by similar troubles at home. 
Germany, as a competitor, is keener and more strenuous 
even than she was two years ago. England, awakened 
in every part, has been undergoing a reorganization 
approaching almost to an industrial revolution. Ex- 
pansion in the machinery trades, which, was won with 
comparative ease by the United States when the con- 
ditions were peculiarly favorable to them, would be 
hard to hold when the conditions were adverse — harder 
still, if once it slipped away, to regain from competitors 
who now bland the best America's mechanical skill has 
devised with a commercial system she can as yet but 
faintly parallel." 

If America is to hold and to improve her indus- 
trial supremacy she must perfect her methods of 
dealing between manufacturers and workmen as she 
has perfected her methods of building bridges and 
locomotives. The operation of her own factories 
and workshops must proceed as smoothly and con- 
tinuously, with as little friction or heating or clash- 



Charles Buxton Going 177 

ing, as do the sewing-machines, the planers, the 
looms, or the engines with which she is supplying 
the four quarters of the globe. She must hold to 
and extend the employment of reason, justice, and 
common-sense in the settlement of trade difficulties. 
She must send the lockout and the strike to the 
scrap heap along with the thousands of other in- 
efficient and obsolete devices she has thrown out of 
her shops. Their wastefulness is intolerable, and 
should be abhorrent. 

Trade Conferences. — The growing movement 
toward organization, among employers and work- 
men both, affords the perfect machinery which 
should be installed in place of the old disorder. I 
believe that in the conferences of the leaders of 
manufacturers' and workmen's organizations lies 
the complete solution of the matter. 

The overwhelming majority desire only what is 
fair and just, and in the organization the few hot- 
heads are harmless against the prevailing reason of 
their fellows. Most of the difficulties of the past 
have arisen from partial ignorance, on the part of 
each side, of the views, the difficulties, and the sur- 
rounding conditions of the other. 

Organization facilitates association, and associa- 
tion promotes understanding. In this voluntary 
arbitration, in which the representatives of the 
co operating parties — capital and labor — are their 
own arbitrators, I believe lies the perfection of har- 
mony and the completion of economy in the indus- 
trial world. 

I do not go so far as to say that it is never 



1 78 Arbitration 

necessary to fight. The upholding of a principle may 
be worth anything it costs. Much of the priceless 
knowledge we have has been won out of the striving 
and suffering of battle. Many of the laws which 
will be recognized in the future adjustment of labor 
difficulties were proved only at fearful cost in by- 
gone strikes. But the body of experience now 
gained should make further contention almost, if 
not quite, impossible. 

Breaking tests are necessary to determine the 
strength of materials — but the engineer does not go 
on testing every individual structure to destruction. 
The old adage says: "In time of peace prepare for 
war." I offer a newer paraphrase: "From lessons 
of war prepare a stable peace." 



COMPULSORY ARBITRATION 

Need of a National Court of Arbitration 
by walter fieldhouse 

THE most vital question now before the Ameri- 
can people is that of labor versus capital. The 
contention between the two is now assuming such 
gigantic proportions as to be a matter of national 
importance. 

What are the prevailing conditions? 

Consolidated capital is organized to reduce com- 
petition and uphold the price of merchandise. Con- 
solidated labor is organized to reduce competition in 
unskilled labor and uphold the price of skilled labor. 

Centralization of corporate bodies, as well as the 
centralization of government, is desirable and bene- 
ficial if conducted on honorable lines. Consolidated 
capital forms commercial unions to prevent the over- 
production of cheap goods. Consolidated labor 
forms labor unions to prevent an. overplus of cheap 
labor. The fundamental principles of each being 
similar, one cannot reasonably interpose objections 
to the principles of the other. Both, however, aver 
that their theories and objects are different. Labor 
says the motto of the capitalist is "To have and to 

179 



180 Compulsory Arbitration 

hold." Labor has no confidence in the good in- 
tentions of capital, and capital retaliates by having 
no confidence in the good intentions of labor. 

Confidence is the keystone of our success in all 
things, — confidence in our form of government; 
confidence in the banks that receive our deposits; 
confidence in the merchants to whom we extend 
credit, and confidence in the workman for faithful 
services rendered. Without confidence the whole 
commercial superstructure falls. 

The interests of labor and capital are mutual. 
The working man of yesterday is the employer of 
labor to-morrow. 

There are unmistakable signs that labor and capi- 
tal are drifting farther apart. These signs are 
accentuated by the prevalence of long strikes, lock- 
outs, and the attending stagnation of labor and 
business interests. The reason of all this turmoil is 
attributed to the lack of a proper tribunal or labor 
court of appeal to which such matters can be re- 
ferred for final adjudication and settlement. The 
State Board of Arbitration has no jurisdiction in 
the premises unless both parties are willing to sub- 
mit their case by mutual agreement, and abide by 
the verdict. National consolidated corporations 
would decline to try their case before any but a na- 
tional court of arbitration, and the National Federa- 
tion of Labor might advance the plea of being able 
to settle their own affairs without the aid or consent 
of any court of arbitration. 

Textile industries have not been troubled much 
by strikes or labor troubles during the past few 



Walter Fieldhouse 181 

years. While operatives have formed unions for 
their own protection and for an average wage scale, 
the industries in the West are scattered and local 
conditions so diversified that labor strikes are very 
rare. The protective tariff has secured our home 
markets and kept manufacturers busy, giving steady 
work to their operatives. Western textile manu- 
facturers have not formed consolidated companies, 
as many have done in the East; therefore labor has 
not become a solid phalanx or union for personal 
protection. 

Western manufacturers have not grown rich, but 
have grown reasonable in their dealings with em- 
ployees. When differences of opinion concerning 
wages have taken place, it has proven most satis- 
factory to invite the operatives to select a committee 
of three or five from their number to hold a con- 
ference with the manager for an adjustment. This 
course has never failed, because it has established 
confidence. 

My personal observation has been that the Ameri- 
can workman cannot be driven, but will never cease 
in his loyalty and fealty if properly led. I maintain 
that the deep gulf which exists between those who 
have labor to buy and those who have labor to sell, 
originates in a lack of good-will between employers 
and employees. 

But textile manufacturers and operatives have 
troubles of their own in other directions. Fifty 
years ago the factories in the New England States 
were operated almost exclusively by native-born 
Americans. They were thrifty and economical, 



1 82 Compulsory Arbitration 

saved their money, and many of them owned their 
own homes. But keen competition among the 
Yankee manufacturers and a desire to hold the 
markets and undersell their competitors turned their 
attention in another direction — the cost of labor. 
Consolidation of capital and upholding of prices of 
goods would have been the proper course. What 
was the result?. Labor felt the first effects, and 
French-Canadians crossed the border by thousands 
and supplanted the natives of New England at much 
lower rates of wages. The French-Canadians lived 
in squalor, were economical, and saved their money, 
had no interest whatsoever in the affairs of their 
adopted country, and their consuming ambition 
amounted to the sum-total of a desire to accumulate 
enough American money with which to return home 
and purchase Canadian farms upon which to spend 
the balance of their lives. The condition is much 
the same to-day, and the native American has been 
forced out. 

A new condition presents itself in another direc- 
tion. The Southern States offer inducements for 
manufacturers to erect plants south of the Mason 
and Dixon line. In addition to mild climate, the 
principal inducement appears to be that labor is 
cheap, the hours of toil unlimited, and no restriction 
placed upon child labor. 

Labor is the first to feel the sting in both cases 
enumerated, and the uninitiated naturally wonder 
why the working man has general cause for com- 
plaint. 

There is another cause of discontent. The rules 



Walter Fieldhouse 183 

of organized labor insist that the entered apprentice 
be taught a thorough knowledge of his duties be- 
fore being passed as worthy and well qualified to 
accept any position. No man can become a lawyer 
without having made a diligent study of his profes- 
sion. The law is very inflexible upon the proposi- 
tion that an apothecary must have a thorough 
knowledge of drugs before compounding prescrip- 
tions for the public, and the law is very drastic and 
severe on the thorough knowledge and skill required 
of a doctor or surgeon before being permitted to 
operate upon the human anatomy. Yet we are all 
permitted to hire, if need be, a bootblack to run 
public elevators in our buildings or works, and daily 
jeopardize the lives of citizens, without the slightest 
restraint, compunction, or penalty. The law says 
the elevator shall be examined. The law makes no 
provision as to the efficiency of the operator. Or- 
ganized labor insists that the operator shall also be 
examined. Organized capital says this is an en- 
croachment upon its right of eminent domain. 

Self-preservation being the first law of nature, we 
have approved a tariff law which protects us against 
invasion of foreign-made goods. This secures to us 
our home markets, conditionally, of course, upon the 
assumption that labor and capital are on terms of 
complete amity. The American workman generally 
approves of the protective tariff, but asks protection 
against the possible contingency of the importation 
of cheap and unskilled foreign labor. The Govern- 
ment of the United States offers this protection by 
prohibiting imported contract labor. 



1 84 Compulsory Arbitration 

Labor unions in Great Britain have so thoroughly 
organized and been so exacting in their require- 
ments that there is now a movement on foot among 
manufacturers to remove their plants to this coun- 
try, where they feel that labor organizations are 
more reasonable in their demands. 

I would suggest the following as a remedy against 
prevailing conditions : 

i. Thorough enforcement of compulsory arbitra- 
tion. 

2. A national law prohibiting children under the 
age of sixteen being employed in any factory or 
workshop. 

3. A national court of arbitration having general 
authority to hear cases and disputes between 
capital and labor and with power to inquire into, 
settle, or adjudicate the same upon their merits. 
Members of this court to be elected every four years 
upon the national ticket. 

4. A national department of commerce to extend 
our commercial interests at home and abroad. 

5. A secretary of the national department of com- 
merce to have a seat in the Cabinet. 



COMPULSORY ARBITRATION 

Arbitration Courts a Logical Necessity 
by henry demarest lloyd 

INSTEAD of being "A Country where Work is 
War " — and civil war at that — America might be 
something very different. In little more than ten 
years we have had the battles of Homestead, Pull- 
man, and Hazleton, the massacres of policemen in 
Haymarket Square during the eight-hour strike in 
Chicago, and of the coal miners at Latimer. In the 
street-car strikes of Cleveland, St. Louis, Albany, 
and other places, we have had riots bloodier than 
many South African encounters worthy of cablegram 
immortality. Our streets have been turned into 
shooting-galleries for troops who practise on the 
innocent and the guilty alike, on men, women, and 
children, killing peaceable citizens and merchants 
standing within the shelter of their own places of 
business. Instead of thus being "A Country where 
Work is Hell " because it is war, and where we may 
have to breathe air thick with murder and dynamite 
whenever the buyers and sellers of labor have a 
difference of opinion about price, we might through 
all these years have had "A Decade of Peace " and 

:3 5 



1 86 Compulsory Arbitration 

the United States might have been "The Country 
without Strikes." 

But we have already travelled — and suffered — 
three quarters of the way toward this delightful and 
inevitable consummation. All through the civilized 
world the people are working more and more toward 
arbitration. There are national and local and trade 
tribunals, public and private boards engaged in 
keeping the industrial peace. They have often suc- 
ceeded in keeping it, and keeping it well. They 
have done vast good and repaid a hundredfold all 
they cost in labor and money. This is the neces- 
sary preliminary work before the final solution of 
the problem. Arbitration of labor disputes by dis- 
interested outsiders has been proved practical and 
beneficent. The next step is to organize it into an 
institution. We must lift it from the region of the 
private into that of the public, from the temporary 
to the permanent. We must make it the sure ref- 
uge of all instead of the accidental good fortune of 
a few, and create out of the general duty of arbitra- 
tion the general right of arbitration. 

Every man who says that public opinion is the 
real arbiter between labor and capital therewith 
gives away the whole case against arbitration courts. 
If it is true that public opinion is the arbiter, as 
every one says — the parties themselves are not the 
arbiters. The decision does not rest with them, but 
upon a tribunal outside of them. They have no 
absolute right to make war, disturb the peace, pros- 
perity, and happiness of themselves, each other, and 
the people. If it is right to go outside the combat- 



Henry Demarest Lloyd 187 

ants to find an arbiter, it is right to find the best 
arbiter, and to make his intervention final and 
efficient. 

We must have "a sound public opinion," as 
Bishop Potter says. But a sound mind must have 
a sound body, and if public opinion is the mind of 
society the law is its body. 

We must have a "Board of Investigation," as 
Mr. Charles Francis Adams says. Our courts are 
boards of investigation, and their investigations in- 
vestigate, because they have the power needed to 
compel the facts to come out into the light. But 
after investigation, what ? W T hat would be the use 
of the investigations of the courts if no one needed 
to mind what they said unless he felt like it? 

We shall get this great blessing of peace in in- 
dustry just as we got peace in our streets — by public 
opinion, but it will be public opinion plus a law. 
Democracy is public opinion plus the law, and 
obedience to the law is voluntary for the majority 
and compulsory only for the intractable. 

All our institutions — the family, property, govern- 
ment — rest on public opinion, but it is not a public 
opinion without statutes, courts, and sheriffs, nor, 
if need be, without the posse comitatus and the Fed- 
eral troops for secessionists. 

It is the "Mind Cure " theory of politics that re- 
form is to be secured by mere public opinion, and it 
is a theory which its advocates take care never to 
practise on themselves. 

Only thieves and philosophical anarchists wish to 
leave the ownership of property to the settlement of 



1 88 Compulsory Arbitration 

public opinion. Let the gentlemen who advocate 
that those questions of the ownership of life and 
property which we call strikes and lockouts shall be 
made subject only to the pressure of public opinion 
convince us of their sincerity by offering to leave 
their property, their charters, their rights, under the 
protection, also, of public opinion without law. As 
Voltaire said to the proposal to abolish capital pun- 
ishment, "Let the assassins begin the reform." 

First the private effort, then the public institu- 
tion. First the kindergartens of Froebel and his fol- 
lowers, then the kindergartens of the public schools; 
first the conscience of the slaveholder in the South 
— the Washington or the Randolph — freeing his 
slaves, the conscience of the Garrison or the Phillips 
who will not let the North remain the accomplice of 
a great wrong, and then the Emancipation Declara- 
tion and the Fifteenth Amendment. The private 
stage of arbitration is near its end. It has done its 
work by proving that labor disputes can be settled 
by disinterested outsiders. The next step is pub- 
lic arbitration, arbitration by law, arbitration by 
courts in which the settlement of labor disputes, if 
otherwise irreconcilable, shall be organized as an 
institution. 

In this age of "Agreements among Gentlemen " 
— to keep their hands out of each other's pockets 
only — the age of the duello seems remote indeed. 
Public opinion put an end to the duello, but it did so 
with the help of the officers of justice. Public opin- 
ion will put an end to the duello between labor and 
capital, and it will do so by precisely similar means. 



Henry Demarest Lloyd 189 

There could be no better credential for the idea 
of arbitration courts than the fact that the leaders 
on both sides are vehemently, passionately, opposed 
to it. Enemies in all else, union labor and union 
capital are friends in their fright at the suggestion 
that the public shall compel them to adopt rules of 
order instead of a military code. Organized capi- 
tal and organized labor stop fighting each other to 
fight side by side against compulsory arbitration. 
Together they kill bills introduced into State legis- 
latures for arbitration. They unite in widely adver- 
tised and expensively managed "Conferences" in 
opposition to it. They are class leaders of class 
movements seeking class advantage; the public is 
their quarry. 

Without the help of any society, with no party, 
with no literary bureau, simply by the magnetism 
which justice draws from the general good-will and 
common-sense the agitation for arbitration courts 
makes headway day by day. It moves visibly along 
the line of the law of social progress never better ex- 
pressed than by William Penn, the great common- 
wealth builder, when he said: "The path of peace 
is justice, and the path of justice is government." 
That is, it is the path of public opinion plus a law. 

That indeed is the proper test of a real public 
opinion. Public opinion does not begin to exist 
until it has crystallized into the resolute use of all 
the power that is necessary: 1st, to investigate; 2d, 
to decide; 3d, to execute. Public opinion in labor 
disputes cannot get publicity without law. It does 
it nowhere else. Public opinion in labor disputes 



/ 



190 Compulsory Arbitration 

cannot get obedience without law, compulsion. It 
does it nowhere else. 

Whenever there is a strike or lockout the chief 
party in interest — the people — drifts helpless in the 
cross currents of a chaotic sea of public opinions 
which struggle in vain to be the " sound public 
opinion " for which Bishop Potter calls. All we have 
is a muddle of hearsay, street talk, newspaper re- 
ports, and "statements " put out sometimes in un- 
scrupulous desperation by both contestants. This 
we must swallow without the possibility of disinfec- 
tion by true publicity. The public does not know 
the facts. It knows it does not know them and it 
knows it cannot know them. 

This butter-fingered tenderness about the use of 
"compulsion " means only that the public has not 
yet made up its mind. The American people do not 
yet want arbitration by courts. They have not yet 
thought enough or suffered enough. They are sure 
to suffer enough to make them think enough. 
When the people do want arbitration instead of war 
they will not hesitate in the true spirit of a virile de- 
mocracy to use all the compulsion necessary to make 
the will and the welfare of the whole people the 
supreme law. 

Arbitration courts are no more "compulsory" 
than other courts. Compulsory arbitration means 
only arbitration by law. Everything done by gov- 
ernment, by law, is compulsion to the extent ren- 
dered necessary by the intractability of individuals 
or a minority. If we always say "compulsory ar. 
bitration " we ought also always to say "compulsory 



Henry Demarest Lloyd 191 

taxation " or "compulsory sanitation " or "compul- 
sory charities." In Boston or New York or Chi- 
cago, which have established baths at the expense 
of the city treasury ,_ the taxpayers wash each other's 
feet by "compulsion." 

Compulsory arbitration adopted by the majority 
after public discussion among a self-governing 
people is voluntary arbitration. To depend on pri- 
vate or unenforced arbitration is to make the preser- 
vation of the public peace a matter of accident, 
caprice, selfishness, or the good or bad humor of in- 
dividuals. There may be arbitration or there may 
be not; the public may get the facts on which to 
base its judgments or it may not; the facts it gets 
may be true or they may be false; the party in the 
wrong may heed the decisions of public opinion if 
there is any such decision or any way to find out 
what it is, or he may not heed ; public opinion with- 
out organs of investigation, expression, or execution 
may go right or it may go wrong. 

Why the chieftains on both sides should be satis- 
fied with this state of affairs, from which either may 
snatch a victory out of ruin for every one, including 
himself, is clear enough. But there is no reason 
why the public should submit to it. There are 
three parties to every labor question, and the great- 
est of these is the public. Whoever is the victor in 
war, the public is always the loser. It is true in 
labor wars, as Wellington said of the other kind of 
wars, that there is only one thing which can be more 
ruinous than a defeat and that is a victory. 

Courts are poor things at best, but they average 



19 2 Compulsory Arbitration 

infinitely higher in justice than war, especially pri- 
vate war. If there was an ''intolerable decision " by 
an arbitration court it would be an exception. It is 
not the habit of the judges of other courts to render 
intolerable decisions, though they do it once in a 
while. In arbitration, public or private, it has not 
been the usual result that decisions were awarded 
which were odious or impossible. It is only reason- 
able to judge of the probable future of arbitration 
by the past. A court of arbitration would be com- 
posed equally of representatives elected by labor 
and representatives elected by capital. It would be 
presided over by a Judge of the Supreme Court of 
the United States. It would sit in the full light of 
publicity aided by experts with access to all books, 
persons, and papers. Such a court, however imper- 
fect, would grind out in the long run decisions more 
tolerable and more practical than are ground out 
now by our anarchy court — our bench of "upper 
dogs," the victors, the fittest who survive. 

Labor troubles as it is are passing under the con- 
trol of the judges, and will do so more and more. 
"Capitalist judges!" the working men say. Far 
better for the striker that the "capitalist judge " sit 
in such an arbitration court than in a star chamber. 

What the ultimate choice of the public will finally 
be between the fear of "intolerable decisions " and 
the fact of the intolerable anarchy we now suffer is 
not a difficult prophecy. It is a choice of compul- 
sions anyhow. On one side the same compulsion as 
now in other disputes of neighbors — to come into 
court if summoned and if no settlement can be made 



Henry Demarest Lloyd 193 

outside. On the other hand the compulsion of ruin 
or surrender for the capitalist, of starvation or sur- 
render for the laborer, and on the public the vastly 
greater sum-total of all the compulsions put upon 
all its parts. Between these compulsions we need 
expect a civilized people, the very breath of whose 
life is reliance upon the processes of law instead of 
whim or violence, to hesitate only long enough to 
understand the issue. 

The humane employer, the reasonable, broad- 
gauge, righteous man, is now at the mercy of the 
worst among his competitors. Strikes are often not 
really contests of employers with employees, but be- 
tween employers who are cutting wages in order to 
cut prices, and are using their working people as 
troops in warring against each other. " Business is 
business," and the man who would like to do busi- 
ness so that it would also be good-will among men 
must suppress such sentimentality and keep up with 
the pace set for him in the practical world or go out 
of the world. An arbitration court would protect 
good employers and honest business men by setting 
up for all their competitors a standard of wages and 
conditions and quality of work below which none 
could go. Competition would be changed from 
downwards to upwards. 

During a recent strike in Connecticut a judge, to- 
gether with an injunction against the men, issued 
an attachment against all their homes, furniture, 
their lifetime savings in the savings-banks, and all 
their other property to make good any damage he 
might later decide they had done to their employers. 



194 Compulsory Arbitration 

In Ohio a suit for $25,000 has been brought against 
some striking metal workers, which if decided 
against them will destroy their union and bankrupt 
every man. The House of Lords in England has 
just made a decision under which it will be possible 
to sweep into the pockets- of employers, held dam- 
aged by courts, all the tens of millions of sick and 
old age and friendly benefit funds which have been 
accumulated for a generation by the English trade- 
unions, putting an end forever to the efforts of labor 
to combine against combined masters. Suits which 
may have this effect have been already begun. 

How do the working men like this kind of com- 
pulsory arbitration? 

Under the system of "arbitration" courts the lia- 
bility of the working men would be limited to a 
fixed sum. The greatest amount collectable from 
a trade-union for a breach of award would be, say, 
$2500, and from an individual member, if his union 
would or could not pay, no more than $50 could be 
taken. 

How do the working men like the compulsory ar- 
bitration they might have? 

Down the vista which stretches between the dis- 
employment with which his present compulsion 
begins and the starvation with which it ends, the 
American working man can see trooping on to meet 
him his police in riot drill, with Gatling guns, hired 
mercenaries dressed as deputy sheriffs, the "crack" 
regiments of militia, judges with injunctions, and 
with dungeons without trial by jury for contempt of 
court, — the new American Icse majeste, — and Regular 



Henry Demarest Lloyd 195 

Army generals on manback with martial law and 
Idaho bull-pens. 

How do the American working men like the com- 
pulsory arbitration they already have? 

Under recent decisions in England (and employ- 
ers' public opinion in this country apparently means 
to force a similar action) corporate liability is to be 
made practically compulsory upon labor organiza- 
tions and is to be used as the last club with which 
capital will beat out the brains of labor. Under a 
system of arbitration, the right of incorporation 
would be made a privilege, an inducement, and a re- 
enforcement to the organization of labor, and would 
be wholly voluntary. 

In Ohio and New Jersey within a few months 
citizens have been fined large sums of money they 
could not pay and have been imprisoned without 
trial by jury because they spoke peaceably to their 
fellow-citizens on the public streets on such matters 
of business as the price of the goods they had to sell 
— their own flesh and blood. 

Under the system of arbitration courts, "govern- 
ment by injunction " would be unknown, every man 
would be free to discuss every aspect of his busi- 
ness in court or out of it, the working men would 
elect in their own trade-unions one half of the 
judges, and all the books, papers, and witnesses 
needed to make clear every question would be within 
reach of this court of which they make an equal part. 

This is the "compulsory arbitration" they might 
have; how do the American working men like the 
compulsory arbitration they have? 



196 Compulsory Arbitration 

Judges decide questions of rent between landlord 
and tenant in Ireland. Judges in this country run 
railroads as receivers and fix prices of all kinds for 
laborers and shippers, for goods and supplies. 
Judges decide between opposing interests as to 
amounts of alimony, allowances in Probate Court, 
and awards for damages. In bankruptcy and receiver- 
ship proceedings they deal with the most compli- 
cated questions of commerce and finance. They have 
power greater than the jury in settling the prices at 
which we sell our legs and arms to the railroad com- 
panies at unguarded grade crossings. Amateur 
judges and professional judges have shown them- 
selves able in all kinds of arbitration proceedings to 
make decisions that were just and acceptable to both 
sides. Even if the presiding judge of the arbitra- 
tion court with a casting vote were a "tool of the 
capitalists" the grist of this mill could not but be 
better than the grist of the injunction mill. 

A judge cannot compel a man to work; that is 
true. Only a Pullman or a Spring Valley Coal Com- 
pany can do that. Arbitration would have to leave 
and does leave workman or capitalist free to work or 
not, as he chooses. But it would say — and enforce 
it — that if he did work he must do it on the terms 
judicially fixed. The working man must have "the 
living wage," the capitalist must have "the living 
profit " fixed by the court. The community that 
has the right to forbid or control dangerous occupa- 
tions has the right to forbid or control the most 
dangerous of all — that of creating paupers and 
derelicts. 



Henry Demarest Lloyd 197 

An arbitration court would not compel the parties 
to arbitrate any more than ordinary courts compel 
them to litigate. But if one wanted to litigate in- 
stead of fighting in the streets the other must de- 
fend himself; that is all. The working men would 
be liable to be called into court by employers only 
if they were incorporated and registered intention- 
ally for that purpose. At any time they could 
withdraw. The employers and employees could 
agree with each other never to go into the arbitra- 
tion court; then neither would have to arbitrate. 
Employers could not summon employees into court 
in any event if these had not organized in order to 
make themselves subject to its jurisdiction. 

The arbitration court would leave labor and capi- 
tal free to make their own bargains as now. They 
could settle their differences in any peaceful way 
they chose; they could maintain private boards of 
arbitration or conciliation. The system would give 
special facilities for that. But if they would not or 
could not keep their troubles out of the way of the 
public, and if one of them would rather arbitrate 
than fight, the other must come into court upon 
being summoned. 

Under arbitration courts employers or laborers 
could knock off at any time. They could stop for a 
vacation ; they could stop because they had made 
money enough; they could stop because they had 
lost money enough. They could stop because they 
did not like each other's looks. All this "freedom 
of the individual " they would have. But under 
compulsory arbitration organized society, public 



198 Compulsory Arbitration 

opinion plus a law, would say to either if brought 
into the court by the other: ''You shall not stop 
work temporarily, in belligerency, to settle by eco- 
nomic violence differences that ought to be settled 
in economic peace. To force the other to make an 
unwilling bargain you shall not dislocate the mar- 
kets, interrupt industry, spread devastation into in- 
nocent homes and businesses, and probably disturb 
the public peace, and bring on riots, arson, and 
bloodshed. If you will not settle your differences 
by private or public arbitration we will settle them 
or you can go out of business, but you must stay 
out until you are willing to play the game according 
to these rules." 

Almost all industry is now carried on by corpora- 
tions. Only from the State can their privileges and 
immunities be obtained. The State can make it a 
condition of all such concessions — as part of the bar- 
gain — that these, its creatures, shall use its arbitra- 
tion courts. In return for incorporation demand 
arbitration! Corporations already existing can be 
brought under the same regime when renewal of 
their privileges is asked for or by the power reserved 
of modifying charters granted by the State. With 
compulsory arbitration thus voluntarily operating 
over more than half the field of modern industry it 
would easily make its way over the remainder. 

The reef of " constitutionality " on which so many 
reforms have been wrecked can thus be avoided. 
But "unconstitutionality" can never permanently 
block social change. "Anything that is for human 
rights is constitutional," said Charles Sumner. This 



Henry Demarest Lloyd 199 

truth is made complete by the equally memorable 
utterance of Mr. Dooley, that the Constitution fol- 
lows the flag, and the Supreme Court follows the 
election returns. 

"Compulsory .arbitration " is no panacea. It is 
not a "social solution." It does not pacify the 
greatest war of all, the war which underlies the 
labor wars, the war between the House of the Million 
and the House of the Millionaire, the age-long war 
between the rich and the poor, in which emancipa- 
tion of slaves and serfs and the enfranchisement of 
peoples were episodes, and which may be now near- 
ing its final crisis. But though a conservative 
measure, and operating only within the boundaries 
of a world of social injustice, it is a vast improve- 
ment on the manners and methods of war, and 
would sweeten humanity for a sweeter solution of 
the greater question. 



COMPULSORY ARBITRATION 

Industrial Courts to Administer Indus- 
trial Justice 

by conrad reno 

i. Industrial Justice. — The principles of law 
should be extended so as to include industrial jus- 
tice. Charity is not sufficient to solve the problem 
of an equitable distribution of wealth. The workers 
do not ask charity, but industrial justice. There 
are many who suffer from the present wage system, 
and who will never obtain fair wages and fair hours 
without the assistance of the law. Free contract 
does not produce just results, because labor has not 
the economic strength or endurance of capital. The 
wage-earner is no better fitted to cope with the cor- 
porate employer than is the passenger or shipper 
with the railroad, or the gas consumer with the gas 
company. In these cases, the individual's moral 
right to fair rates has been made a legal right in 
many States, and boards or commissions have been 
established by law, with power to prescribe maxi- 
mum rates for the future, based upon principles of 
justice instead of upon the principle of charging all 
the traffic will bear. 



Conrad Reno 201 

The moral right to fair wages and fair hours 
should be made a legal right by statute, and a pub- 
lic tribunal should be established to decide what 
shall be fair wages and fair hours. At present this 
is not a legal right. Judge Thomas M. Cooley, in 
his address as President of the American Bar As- 
sociation in August, 1894, said: 

"They (the ordinary courts) cannot enforce mere moral 
duties unless the law has made such duties legal also. 
But the vast majority of labor controversies involve, as 
between the parties to them, no question whatever of 
legal right. They involve disputes over wages or hours 
of labor, where no binding contract exists which fixes 
them; disputes as to the continuance of the relation, 
when one party or the other desires to terminate it and 
his moral right to do so is disputed, but not his legal 
right; disputes as to the employment of non-union men, 
and the like." 

Until the legislature converts the moral right to 
receive fair wages and fair hours into a legal right, 
the courts can do nothing toward the attainment of 
industrial justice. The courts "can only decide on 
established principles and rules, and are not em- 
powered to create rights or initiate new powers or 
privileges." 1 

Labor has been mistaken in believing that redress 
of this nature could be obtained in the courts with- 
out further legislation. As soon as the legislative 
department of government, however, declares by 
statute that the right to fair wages and fair hours 

1 Barr v. Essex Trades Council, 53 N. J. Eq., 101, in (1894). 



202 Compulsory Arbitration 

shall be a legal right, and creates industrial courts to 
decide what shall be a fair minimum wage, and a 
fair maximum work-day, then the ordinary courts 
will enforce this right, because then the right will 
have ceased to be merely a moral right and will have 
become a legal right. 1 

The efforts of all lovers of industrial justice should 
be of a political nature, to obtain the passage of 
favorable laws; and until this has been accom- 
plished, the courts should not be appealed to, as it is 
not the judiciary, but the legislature, which has the 
power to create new rights and to make them legal 
rights. 

Industrial peace obtained by injunction and the 
bayonet, without industrial justice, is like "the 
peace of Warsaw." It does not allay social discon- 
tent; on the contrary, it greatly aggravates it, and 
causes labor to believe that the courts are on the 
side of capital and against labor in all disputes. 

In a democratic republic like the United States 
this feeling among large numbers of men is danger- 
ous in the extreme, and immediate steps should be 
taken to restore their faith and confidence in the 
judiciary. 

This can be accomplished by creating industrial 
courts, empowered to investigate all the facts, and 
to decide what shall be a minimum wage and a 
maximum work-day, with special regard to securing 
industrial justice and preserving the American 
standard of living. 

1 Holden v. Hardy, 169 U. S., 366 (1898) ; Commonwealth v. 
Hamilton Mfg. Co., 120 Mass. 383 (1876). 



Conrad Reno 203 

The function of government should be extended 
through the industrial courts so as to act intelli- 
gently and justly upon all phases of industrial dis- 
putes. Industrial peace will never be long-continued 
unless accompanied by industrial justice. The vic- 
tims of injustice feel it, and know that they suffer 
from it, even when they are unable to agree upon a 
remedy. The equity courts may continue to enjoin 
strikers from now to the crack of doom under the 
present system, without securing industrial peace, 
because their decrees are not based upon industrial 
justice, but merely upon a little knowledge of one 
part of the question, and no knowledge of the other 
parts of the question. The question in controversy 
relates to wages and hours of work, and the equity 
courts decide that A's recent employees must not 
interfere with A or with other workmen who wish to 
obtain their places. It is obvious that the decision 
does not meet the exigencies of the situation. 

Industrial justice to labor requires full and com- 
plete knowledge of all these facts before a decree is 
entered by any tribunal. As the equity courts do 
not possess this knowledge and have no means of 
learning all the facts, they are unable to deal justly 
and intelligently with labor disputes. Their powers 
and processes are inadequate to the situation, be- 
cause they act only upon one phase of the question. 
Industrial peace is important, but industrial justice 
is still more important. 

This plan makes it the duty of an impartial public 
tribunal to see that labor has fair wages and fair 
hours; and the industrial court is given full power 



204 Compulsory Arbitration 

and authority to ascertain all the facts bearing upon 
wages and hours, and to decide what shall be the 
minimum wage and the maximum work-day. 

Labor and Capital as Partners. — Labor and 
capital should be regarded as partners in production, 
and the product of their joint efforts should be fairly 
and equitably divided between the partners in pro- 
portion to the industrial value contributed by each 
partner. The "iron law" of wages, based upon 
supply and demand, should be disregarded, and the 
golden rule of wages should be substituted in its 
place. Human labor, being the creator of commodi- 
ties, and being inseparable from a human being, 
should not be subjected to the commodity test of 
supply and demand in determining its money value. 

After the industrial court obtains exact knowledge 
of the amount of wealth produced by a given cor- 
poration and its employees within a given time, it is 
not a very difficult matter to decide how much of 
that wealth should go to labor in the form of wages 
and how much should go to capital in the form of 
dividends. Questions of the same nature are de- 
cided by railroad and gas commissions when they fix 
rates and charges, and the decision should be based 
upon similar principles. A corporate employer 
should not be allowed to beat down wages below the 
American standard of living any more than a rail- 
road should be allowed to charge all the traffic will 
bear. The law should protect the employee from 
low wages just as it protects the public from high 
railroad rates and high gas charges. Wages should 
be a first charge upon production, and no corpora- 



Conrad Reno 205 

tion should be allowed to pay less than the minimum 
wages fixed by the industrial court after due investi- 
gation of all the material facts. Freedom of con- 
tract between a corporation and an individual 
workman does not produce just wages or hours, any 
more than freedom of contract between a railroad 
and an individual passenger would produce just 
rates. The law should interpose in both cases to 
protect the individual from the superior industrial 
strength of the corporation. 

At present, the worker has no means of learning 
the exact amount of wealth which he produces by 
his work, and he has no legal tribunal to help him in 
obtaining his just share of the wealth produced by 
himself and others. 

Under this plan, whenever a large number of the 
employees of a certain corporation feel that their 
wages are too low or their hours too long, they may 
appeal to the industrial court to investigate and 
decide these questions, and no interruption to produc- 
tion will occur, as has been demonstrated in Ne$v Zea- 
land, where industrial courts have existed since 1895. 

The labor situation of to-day resembles the rent 
situation in Ireland prior to 1881. Frequent dis- 
putes between landlords and tenants arose as to the 
amount of rent ; evictions were common and brutal, 
and attended with violence, destruction of property, 
and loss of life. The tenants combined and orga- 
nized for mutual protection, and boycotted some of 
the landlords and their agents. Rents were fixed by 
contract between the parties, but the tenants claimed 
that the rents were too high and unfair. 



206 Compulsory Arbitration 

The English Government tried for many years to 
obtain peace by passing Land Acts for Ireland, and 
by increasing the force of constables and police. 
The disturbances grew worse and worse. In 1870 
Parliament passed the Landlord and Tenant Act, in 
which by Section 25 rents could be fixed by arbitra- 
tion, if both sides agreed to submit the question to 
arbitration. 

This law failed to accomplish any good, for the 
same reasons that voluntary arbitration laws have 
failed in labor disputes; both sides will not agree to 
submit to arbitration, and the decision cannot be 
enforced. 

Tenants were poor and more numerous than ten- 
ancies, and their necessities forced them to overbid 
one another for a place in which to work and live. 
Rents, being fixed by contract under these condi- 
tions, were above a fair standard.. 

In none of thelaws before 1881 was any tribunal 
established with the power or duty to protect the 
tenant by fixing fair rents. All of these laws ig- 
nored the question of industrial justice, and for this 
reason they failed to obtain industrial peace. The 
court which ordered the eviction of the tenant for 
non-payment of rent was not authorized to inquire 
into the question of whether or not the rent was fair 
and reasonable. Even if the court thought the rent 
too high, and the tenant was able and willing to pay 
the amount of a fair rent, the court could not pro- 
tect him, but was obliged by law to order his evic- 
tion, if he did not pay the amount which he had 
agreed to pay. 



Conrad Reno 207 

A similar condition now exists with respect to 
labor; even in cases where all reasonable men agree 
that the wages are too low or hours too long, and 
the workmen are willing to work for fair wages and 
fair hours, there is no tribunal authorized to protect 
the workmen or which has the power to determine 
what shall be fair wages and fair hours, and the 
equity courts are merely allowed to pass upon a side 
issue and not upon the broad question of industrial 
justice. 

In the year 1881 the Liberal party, under the 
leadership of William E. Gladstone, passed the first 
law which enabled the tenants to obtain a measure 
of industrial justice and fair rents, and industrial 
peace and prosperity have been on the increase ever 
since that time. This statute created a Land Court 
and Land Commission for Ireland, with power to de- 
termine what should be a fair maximum rent for a 
given agricultural holding for -fifteen years in the 
future. 

The tenant is given the legal right to appeal from 
the landlord to the Land Commission and then to the 
Land Court to fix the rent for his holding, and the 
landlord cannot collect any higher rent than that 
fixed by these tribunals, nor evict the tenant so long 
as he pays the rent so fixed. Notwithstanding the 
fact that these judges and commissioners are ap- 
pointed by the British Government, and that the 
Government has been controlled part of the time by 
the Conservative party, which strongly opposed the 
passage of the law, about three hundred thousand 
disputes between landlords and tenants have been 



208 Compulsory Arbitration 

peacefully settled, and rents have been reduced 
more than twenty per cent, on the average. 1 

A large number of commissioners has been em- 
ployed upon this work in Ireland since 1881, and, 
considering the source of their appointment, it is not 
strange that their decisions have not been uniform, 
nor that some of them have failed to meet the re- 
quirements of industrial justice. In nearly all cases 
rents have been reduced, but the reductions have 
varied from eight or ten per cent, to forty or fifty 
per cent. 

The results have not been entirely satisfactory to 
the Irish people, but the dissatisfaction is due chiefly 
to the fact that the judges and commissioners do 
not derive their authority from the Irish people, but 
from the English Government, which has been con- 
trolled a large part of the time by Ireland's political 
opponents. If the Irish people controlled the ap- 

1 A report of a select committee of seventeen members appointed 
by the House of Commons to investigate the working of this act in 
1894 shows that the gross amount of rental dealt with from 1881 to 
March 31, 1894, was ^6, 140,602, and that this total has been re- 
duced by ,£1,279,475, or 20.8 per cent. The same report, dated 
August 20, 1894, also states that the total number of fair rents fixed 
by the different methods permitted by the statute from 1881 to 
March 31, 1894, was 294,654, divided as follows : 

By Land Commission Courts 157,178 

By County Courts 15,537 

By Landlord-and-Tenant Agreements 121,902 

By Voluntary Arbitration under Sec. 40 37 

Total number of rents fixed 294,654 

Cases struck out, withdrawn, or dismissed 60,236 

Total number of cases 354,890 



Conrad Reno 209 

pointment or election of the Land Court judges and 
commissioners, there would probably be no dissatis- 
faction in Ireland upon the rent question. The ex- 
perience of Ireland since 1881 has proved that the 
judicial principle of fixing rents by impartial tribu- 
nals is much better and fairer and more conducive 
to industrial peace and justice than the former 
method of fixing rents by free contract between the 
parties. Even the Conservative party has admitted 
the truth of this, by extending and keeping alive the 
law of 1881 to the present time. 

Starting with an impartial tribunal, the attainment 
of industrial justice depends largely upon knowledge 
and power, — knowledge of all the material facts, and 
power to enforce its conclusions. At present we 
have no tribunal which possesses the means for ob- 
taining knowledge of all the material facts, nor is 
there any power to enforce just conclusions upon 
the subject of wages and hours. It is therefore not 
strange that we suffer from industrial injustice. 
Under this plan, impartiality and knowledge would 
exist in the industrial court, and the power to en- 
force its conclusions would exist in the ordinary 
courts of law. 

The industrial court should be controlled by the 
people of the state or country in which the indus- 
trial dispute arises, and not by some foreign or un- 
sympathetic power. When a labor dispute arises 
between a corporation and a number of its em- 
ployees, the industrial court should possess the 
power to hear the parties, to compel the attendance 
of witnesses and the production of books and papers, 



210 Compulsory Arbitration 

and to decide what shall be a fair minimum wage 
and a fair maximum work-day for a reasonable time 
in the future, not exceeding two years; but the 
court should not be authorized to order employees 
to work, nor to order capitalists to carry on business. 
The ordinary courts of law should be given the 
power to try corporations charged with violations of 
such decisions of the industrial courts, and to im- 
pose appropriate penalties, in the form of fines, re- 
ceiverships, and forfeitures of charters. These 
powers and penalties are sufficient to ensure the 
practical working of the plan. In the course of 
time, every corporation would be obliged to con- 
form to the standard wage and work-day established 
by the industrial court. 

This plan of industrial courts occupies a middle 
ground between the inefficiency and weakness of 
voluntary arbitration on the one hand, in which 
there exists no power to decide the question in dis- 
pute without the consent of both sides, or to enforce 
the decision, and, on the other hand, the tyranny of 
compulsory arbitration, in which an employee may 
be fined and imprisoned for working at less than the 
wages fixed by the board, or an employer may be 
fined or imprisoned for discharging or refusing to 
employ certain workers. 

Under this plan, no fine or imprisonment attaches 
to the individual, whether he be an employer or an 
employee, a stockholder or a bondholder. The cor- 
porate employer is the only legal entity which is 
subject to penalties, and it only for violations of the 
prior decisions of the industrial court. If the cor- 



Conrad Reno 211 

poration is unwilling to pay the minimum wage, it 
may cease business and thus avoid all penalty. It 
may also select its employees and discharge them 
for any reason which is now valid at law If the em- 
ployees are not willing to work upon the wages and 
hours fixed by the industrial court, they may refuse 
to work, or may work at any other wages or hours, 
without incurring any penalty. The desire of the 
corporation to earn dividends and the desire of 
the employees to earn wages are sufficient to keep 
the wheels of industry in rapid motion. 

That the penalty is imposed only upon the corpo- 
rate employer and not upon the employees is justified 
by usury laws, which impose a penalty upon the 
money-lender, but none upon the money-borrower, 
and also by the laws authorizing railroad and gas 
commissioners to fix maximum rates, which impose 
penalties upon the corporations, but not upon the 
individuals. 

A minimum wage without a penalty upon the 
wage-earner differs materially from a maximum 
wage with a penalty imposed upon the wage-earner 
for accepting higher wages. The purpose of all the 
early laws and decisions concerning wages was to 
reduce wages below the market-rate or contract- 
rate, and a maximum wage was therefore fixed, and 
a penalty was imposed upon the wage-earner for 
asking or receiving higher wages. This policy was 
inaugurated by England in 1 35 1 , shortly after the 
Great Plague or Black Death which carried off one 
third of England's population, and was continued 
for several hundred years. The contract-rate of 



212 



Compulsory Arbitration 



wages immediately after this plague was double or 
treble that which prevailed just before the plague, 
and the employers desired to reduce wages to the 
former rates. The first Statute of Laborers was re- 
enacted thirteen times within the century following 
its passage, and the cruelty and injustice practised 
upon the laborers under these laws embittered them 
against the Government and against the employing 
class, and was one of the principal causes of the 
Peasants' Rebellion. 1 

It is apparent that these early Statutes of Laborers 
deprived the workers of industrial liberty, and cre- 
ated a state of practical slavery. The effect of the 
industrial court law, on the contrary, would be to 
enlarge industrial liberty and to lessen industrial 
license. It would protect the great majority of the 
honest employers and able workers from the few 
greedy employers and needy workers who now hold a 
license to cut wages and prices of the product, and 
indulge in unfair competition. The industrial court 
would prevent wage-cutting and thereby increase in- 
dustrial liberty for the majority of both classes. 

At present an employee cannot be compelled to 
perform manual labor or services for his employer, 
even when he has contracted to perform such labor or 
services, and any statute which purported to author- 
ize a court to compel the specific performance of 
such a contract would be unconstitutional and void, 

1 Industrial and Social History of England, pp. 107, no, by Prof. 
Edward P. Cheyney (1901) ; Rogers's Six Centuries of Work and 
Wages ; Savage's Winthrop, vol. i., pp. 36, 138, 139 ; vol. ii., p. 29 ; 
Opinion of the Justices, 163 Mass., 592 (1895). 



Conrad Reno 213 

as contrary to the Thirteenth Amendment to the 
Constitution of the United States. 1 The only ex- 
ception to this rule in civil life is that of sailors, who 
enjoy special favors under the law in other respects; 
if they desert the ship during the term of their con- 
tract, they may be arrested and returned to the ship 
to perform their contract for services. 2 

When the industrial court fixes a minimum wage 
in a dispute between a certain corporation and its 
employees, it necessarily bases its decision upon a 
certain quantity and quality of work, which should 
be fully set forth in its decree. The decision of the 
industrial court merely establishes that the corpora- 
tion in question shall not pay less wages than the 
sum named for work of the prescribed quantity and 
quality. Its decision does not preclude an inquiry 
by the ordinary courts into the question of the 
workman's compliance or non-compliance with the 
quality or quantity of work stated. If the employee 
sues the corporation in a court of law for the mini- 
mum wage, he must prove that his work in quality 
and quantity is equal to that prescribed by the de- 
cree of the industrial court; if his work be inferior 
in these respects, he can only recover a smaller sum 
as wages. If the corporation is prosecuted in the 
ordinary courts upon the charge of paying less than 
the minimum wage to A, B, or C, the Government 
must prove, not only the payment of less than the 

1 Arthur v. Oakes, 63 Fed. Rep., 310 ; 11 C. C. A., 209 (1894) ; 
Cote v. Murphy, 159 Pa. St., 420, 425 (1894) ; In 7-^.Debs, 158 U. 
S., 564, 598 (1895) ; Mary Clark's Case, 1 Blackford (Inch), 122(1821). 
' 2 Robertson v. Baldwin, 165 U. S., 275 (1897). 



214 Compulsory Arbitration 

minimum wage, but also that the work performed 
by A, B, or C was equal to the standard prescribed 
by the industrial court; and if the Government fails 
to prove these facts, the accused corporation should 
be found not guilty. These provisions protect the 
employer from the injustice of being compelled by 
law to pay standard wages for work below the stand- 
ard, and render the law of industrial courts just 
and constitutional. 1 

This plan also protects the honest and humane 
employers from the cut-throat competition of their 
dishonest and unscrupulous rival in the same line 
Of industry. "Private industry is such that, very 
generally, one man, mean and unscrupulous, is able 
to coerce nineteen others." 2 The former have to 
compete with the latter in the sale of the product, 
and, under the existing- system of unregulated 
wages, the mean employer often succeeds in beating 
down wages below a fair standard, and thereby in- 
creases his profits while underselling his generous 
competitors. With this plan of industrial courts in 
operation, however, the mean and unfair corporation 
could be compelled to pay the standard wage, or 
cease business, and both classes would stand upon 
an equal footing in the large item of labor-cost. 

2. Strikes, Lockouts, Injunctions, and 
Prosperity. — Under the existing system, to strike 

'Com. v. Perry, 155 Mass., 117 (1891) ; Opinion of the Justices, 
163 Mass., 589, 594 (1895) ; Hancock v. Yaden, 121 Ind., 366 
(1890); Frisbie v. United States, 157 U. S., 160; Georgia Railroad 
Co. v. Gouedy, in Ga., 310, 36 S. E., 691 (1900). 

2 Socialism and Social Reform, p. 316, by Prof. Richard T. Ely 
(1894). 



Conrad Reno 215 

is sometimes the only way in which labor can obtain 
fair wages and fair hours and maintain the American 
standard of living. To enjoin the strikers in such a 
case has the effect of lowering the standard of liv- 
ing, and is injurious to the community. 

To illustrate, suppose that corporation A is em- 
ploying one thousand persons at wages and hours 
which are just sufficient to preserve the American 
standard of living; that A orders wages to be re- 
duced twenty per cent. ; that the employees refuse 
to accept the reduced wages and go on strike; that 
a thousand foreigners offer to take the places of the 
strikers at the reduced wages, and that the strikers 
attempt to prevent the foreigners from taking their 
places at those wages. 

If an equity court enjoins the strikers and im- 
prisons the leaders, the strike is very likely to fail, 
and wages will be reduced twenty per cent, below 
the American standard. 1 Corporation A having 
succeeded in reducing wages, all its competitors will 
attempt to reduce wages also, in order to compete 
with A in the sale of the finished product, and some 
will employ the lockout. The result is that the 
purchasing power of the employees is reduced, and 
the American standard of living is lowered. The 
consumer may secure some benefit in the form of 
lower prices, but this is obtained at the expense of 
labor, and does not compensate for the loss suffered 
by lowering the standard of living. 

1 Testimony of Eugene V. Debs on the Pullman strike, in Report 
U. S. Strike Commission, p. 143 (1895); In re Debs, 158 U. S., 564 

at 597 (1895). 



216 Compulsory Arbitration 

With industrial courts, however, injunctions 
could not be used as a club to beat down the 
American standard of living. It would be the chief 
duty of the industrial courts to keep wages and 
hours equal to the American standard, which should 
be always the highest standard in the world. After 
wages and hours have been fixed by the industrial 
courts, the ordinary courts of law would enforce the 
minimum wage and maximum work-day by penal- 
izing any corporation which paid less wages or 
worked its employees longer hours than those fixed. 
By these means the American standard of living 
would be preserved, wages would be kept and ex- 
pended in this country, and the American laborer 
would be protected from the competition of the 
cheap foreign laborer, who now comes here merely 
to make money and goes abroad to spend it, and 
does not become an American citizen. 

Whenever a dispute arose it would be taken to the 
industrial court for settlement before the passions 
of either side had been aroused. There would be 
no strike or lockout, and no reason for action by the 
equity courts. Government by injunction would, 
therefore, become obsolete. 

A new tribunal, authorized to investigate all the 
material facts relating to wages and hours, is needed 
to administer industrial justice. It should possess 
the power to examine books and papers and wit- 
nesses in order to ascertain the value of the wealth 
created by the joint efforts of labor and capital. 
The equity courts possess no such powers, and in 
granting injunctions no attempt is made to learn any 



Conrad Reno 217 

of the material facts bearing upon fair wages or fair 
hours. 

The courts of equity cannot ascertain the facts re- 
lating to these questions. They do not attempt to 
decide what shall be a fair minimum wage or a fair 
maximum work-day, and they possess no power or 
jurisdiction to decide either of these questions. 
When they issue injunctions against strikers, it is 
done for the purpose of preventing a threatened loss 
of property, and not because the wages or hours are 
fair or equal to the American standard. The ele- 
ment of industrial justice does not enter into the in- 
junction at all. If the right asserted be a personal 
right, as distinguished from a property right, the 
court will not issue an injunction. 1 

The strike is labor's sword and shield, and, under 
the present conditions of employment, the power 
to strike is necessary and should not be denied as 
long as capital has the power to lock out. To en- 
join strikes, but to refuse to enjoin lockouts, de- 
prives labor of its best weapon, and places it at a 
disadvantage in its struggle for a fair share of the 
joint product. 

A lockout, as well as a strike, is a stoppage of 
work and industry, and each is undertaken for the 
purpose of forcing the other side to accept some 
terms which it is unwilling to accept. They are 
both detrimental to the public welfare; but to en- 
join strikes and not lockouts is to discriminate 
against labor and in favor of capital. It is unjust 
to decide that a lockout or a black list is merely 

1 Worthington v. Waring, 157 Mass., 421, 423 (1892). 



218 Compulsory Arbitration 

competition and lawful, but that a strike or a boy- 
cott is a conspiracy or a restraint of trade, and un- 
lawful. 1 

There is no moral justification for using a lockout 
to reduce wages below the American standard. 
After one employer has succeeded in reducing 
wages below this standard his competitors may be 
forced to do likewise, and to use the lockout to ac- 
complish this purpose. If other employers continue 
to pay fair wages, they may not be able to sell the 
product at as low a price as their unscrupulous rivals, 
so as to leave a fair profit. The result is that the 
honest and generous employers are often forced to 
lock out their men and to reduce wages, because 
otherwise they cannot compete successfully with 
their dishonest and unscrupulous rivals in the same 
line of business who beat down wages. If the dis- 
honest ones could be compelled to pay fair wages, 
or stop business, the honest and generous employers 
would be protected from such unfair competition, 
and would not attempt to reduce wages by a lock- 
out or otherwise. Industrial courts would compel 
the dishonest employers to pay fair wages or to stop 
business, and in this way would prevent many lock- 
outs, and protect both the wage-earner and the 
honest employer. 

Industrial courts will abolish government by in- 
junction and will stop strikes and lockouts. The 
experience of New Zealand, where industrial courts 

1 Commonwealth v. Hunt, 4 Metcalf (Mass.), in (1842) ; Allen 
v. Flood (1898), A. C, 1 ; Hopkins v. Oxley Stave Co., 83 Fed. 
Rep., 912, 933 (1897). 



Conrad Reno 219 

have existed since 1895, goes far to prove this state- 
ment. Government by injunction has grown out of 
or been developed by strikes and lockouts. It repre- 
sents an attempt by the Government, acting through 
the courts of equity, to obtain industrial peace, and 
to prevent disputes between labor and capital from 
assuming dangerous proportions. 

Strikes and lockouts do not occur in New Zea- 
land, because all the disputes between labor and 
capital are now settled peacefully by the industrial 
courts. 1 Government by injunction, therefore, does 
not exist in New Zealand. For like reasons it 
would cease to exist in the United States if we had 
industrial courts. 

Industrial prosperity for all classes will follow 
quickly in the train of industrial justice and indus- 
trial peace. Strikes and lockouts and boycotts often 
amount to industrial wars, and entail losses aggre- 
gating millions of dollars. If such disputes were 
averted, the annual production would be much 
larger than it is at present. This increase in wealth 
would constitute an additional fund, out of which 
larger dividends to capital and higher wages to labor 
could be paid, without raising the price to the con- 
sumer. 

If we should become the first large manufacturing 
country to secure industrial peace and freedom from 
strikes and lockouts, we could take possession of the 
world-markets and hold them against England, 
Germany, and France. The foreign trade of these 
countries is seriously crippled by the strikes and 

1 A Country without Strikes, by Henry D. Lloyd (1900). 



2 20 Compulsory Arbitration 

lockouts of recent years, and we need only industrial 
peace in the United States to enable us to compete 
successfully with all these countries in foreign fields. 
In many lines, we are now producing more than we 
can consume at home, and we must either enter for- 
eign markets or curtail production. To curtail pro- 
duction means less work, less wages, and less 
dividends. Foreign markets are, therefore, essential 
to industrial prosperity; and the best way to com- 
pete with the other manufacturing nations is to be- 
come the first nation to reconcile labor and capital, 
and to stop strikes, lockouts, and boycotts by in- 
troducing and administering industrial justice. 1 

1 A bill to establish an industrial court on the general lines sug- 
gested in this paper was introduced in the Massachusetts Legisla- 
ture on January 24, 1902. 



COMPULSORY ARBITRATION 

The Experience of New Zealand 

by hugh h. lusk 

THE Compulsory Arbitration Law of New Zea- 
land, it may fairly be admitted at starting, is 
still in the stage of a first experiment. It has only 
been in general operation between six and seven 
years, even in the country of its birth, and this fact 
must be borne in mind in considering the question 
of its application to not a few conditions which 
might arise there, and would sooner or later be sure 
to arise elsewhere if it were applied on a larger 
scale. The origin of the law was the great and gen- 
erally recognized disaster to trade and prosperity of 
every kind that followed on the labor troubles that 
began in Australia and extended to New Zealand in 
1893. These involved nearly every branch of indus- 
try for months, paralyzed production, and for the 
time brought to a standstill a prosperity which had 
up to that time been so great as to be almost with- 
out parallel among civilized nations. The great 
strike finally ended in the practical defeat of labor 
and the general victory of capital; but it was recog- 
nized on all sides that it was a victory which, even 

221 



222 Compulsory Arbitration 

for the conquerors, was almost as serious as defeat, 
while for the public at large it was an all but un- 
mixed evil. 

In Australia there was much discussion of possi- 
ble measures that might prevent the recurrence 
of such a general catastrophe, but it resulted in 
nothing more important than the passage by one 
or two of the Colonial Parliaments of acts providing 
machinery for arbitration in case it might be possi- 
ble to bring about a voluntary agreement between the 
disputing parties. In New Zealand such a method 
of dealing with the acknowledged evil appeared to 
the leaders of public opinion to be inadequate. In- 
quiry convinced them that it was not the want of 
machinery for arbitration that prevented its adop- 
tion in great trade disputes, but rather the fact that 
one party or the other had a lurking doubt as to the 
entire justice of its position, and a more or less well 
grounded confidence in its own strength to compel a 
favorable issue by an appeal to conflict. In New 
Zealand, more perhaps than elsewhere, there has 
long been a tendency to regard all public questions 
from the standpoint of the interest of the great ma- 
jority of the public rather than from the narrower 
one of how they affect one or two classes of the peo- 
ple, and such a result appeared to ignore the well- 
being of the general community. 

The compulsory law of New Zealand was the out- 
come of this feeling, and, it must never be forgotten 
in considering its merits or defects, rests professedly 
on this basis. It is the expression of the decision of 
the majority of the people that strikes and lockouts, 



Hugh H. Lusk 223 

even if they could benefit one or other party to the 
immediate quarrel, are in the nature of civil wars, 
and are a positive injury to the mass of the people 
who are not directly interested in the quarrel. To 
prevent this injury to the public seemed to the Par- 
liament of New Zealand in all respects as legitimate 
as it would be to prevent the settlement of any 
other class of private differences by the law of the 
strongest, and the only question that arose there 
was how far compulsion could be applied with 
success. 

The Law. — The main features of the law now in 
force are, first, that it rests upon the voluntary basis 
of association, so that no individual— whether work- 
man or employer — can invoke the assistance of the 
law unless in his capacity as representing an organiza- 
tion duly registered under the provisions of the law. 
Thus trade-unions are made in New Zealand the 
basis of compulsory arbitration. Second, that before 
compulsion is resorted to every effort must be made 
to bring about an agreement by conciliation, applied 
by a board equally representing, through freely 
elected delegates, workers, and employers. Third, 
that failing an agreement through the agency 
of the Conciliation Board either party may — but 
neither is compelled to — appeal to the Arbitration 
Court for a final decision. Fourth, that an appeal 
to the court acts as a stay of all other proceedings 
whatsoever in the dispute; that is to say, no em- 
ployer shall close his works or dismiss his workers, 
and no workers shall strike against the employers, 
in connection with the matters in dispute, until the 



224 Compulsory Arbitration 

question has been dealt with by the court, on pain 
of being treated as being in contempt and subject to 
fine and imprisonment. Fifth, that the Arbitration 
Court itself shall consist of three members, one rep- 
resenting the workers' and one the employers' as- 
sociations, while the third, and president of the 
court, shall be one of the judges of the highest court 
of the country. 

There are many other provisions, providing for 
the details of working — such as the time limit 
within which a case must be heard and dealt with 
by the court; the publicity of all proceedings in 
the court; the appointment of skilled assessors in 
each case; and the powers of the court to com- 
pel the production of all such evidence as it con- 
siders necessary, or, failing such production, the 
power to assume that it is wholly adverse to the side 
refusing or delaying its production. All these, how- 
ever, as well as the provisions for reducing the cost 
of appeal to the court to a nominal sum, and for re- 
ducing the cost of procedure by excluding lawyers 
from appearing for either party, may be looked on 
as secondary to the main principles of the system. 

The method of procedure may be very briefly 
sketched, by way of illustration. Should a differ- 
ence arise in any part of New Zealand between the 
employers and workers in any industry, it is in the 
power of either party — conditionally, however, upon 
that party being duly registered as an association 
under the act, with office-bearers empowered to act 
in its name, and render its funds liable for fines or 
costs — to refer the question by an application in 



Hugh H. Lusk 225 

writing to the local Board of Conciliation. The 
board must give immediate notice of the reference 
to the other party — through its proper officer if it is 
an associated body, or individually if it is not — 
calling upon it to appear and submit its case at a 
fixed time to the board. The board — which con- 
sists of five members, four locally elected by the reg- 
istered workers and employers, respectively, and a 
fifth agreed upon between the four as chairman — sits 
and takes evidence informally, but publicly, and en- 
deavors to bring the parties together in an agree- 
ment. Should it fail it gives a decision on one side or 
other, and its work is completed. 

The decision thus given cannot be enforced in 
any way, except by an appeal to the Arbitration 
Court by either of the parties — if both are regis- 
tered associations under the act, or if not by the 
party that is registered — and this also may be 
done by simple notice of the question and of what 
has been done to bring about a settlement. The 
fee payable on this appeal is merely nominal, and 
the case at once becomes the property of the 
higher court, which immediately notifies the other 
party of the appeal, and of the time and place — 
not being more than forty days after the reference, 
and if possible in the locality where the dispute has 
arisen — where the case will be tried. Until it is 
tried, and indeed from the moment of its first refer- 
ence to the Board of Conciliation, the parties are 
enjoined against taking any steps to alter the posi- 
tion of matters — that is to say, no employer shall 

dismiss a worker, and no worker shall leave his 

15 



226 Compulsory Arbitration 

employment, for any cause relating to the matters 
in dispute. 

The trial, when it does take place, is, in externals 
at least, less formal than one in the Supreme Court; 
yet the powers of the Arbitration Court are in some 
respects even greater. It is not bound by the same 
hard-and-fast rules of evidence as prevail in the Su- 
preme Court; and it is specially authorized to exer- 
cise a discretionary power not given to the more 
strictly legal court in several directions. The object 
of this latitude of procedure is to enable the court 
to arrive at a conclusion not only just but politic in 
many cases of dispute where strict justice might be- 
come oppressive to one or other of the parties, or 
might fail to protect the public interests involved in 
the dispute. The court, indeed, is emphatically one 
of equity, in its broad rather than in its legal sense; 
and thus it has been found not only wise but neces- 
sary to vest large discretionary powers in its 
judges. 

In practically every case assessors are called in by 
the court to assist it by their special knowledge of 
the business in which the dispute has arisen, and 
these are selected as representing the point of view 
of the employer on the one hand and the worker on 
the other. These assessors have only the function of 
advisers to the court, without having any voice in the 
ultimate decision. As already stated, the cases are 
conducted by the parties themselves, assisted by the 
court, and thus a great deal of time is saved. The 
court may, and as a rule it does, require the produc- 
tion of all books of account and records of the busi- 



Hugh H. Lusk 227 

ness that seem calculated to throw light on the 
question at issue; and any refusal, or professed in- 
ability, to produce such books, while it may be 
treated as a contempt of the court and punished ac- 
cordingly, may also be and more generally is treated 
as a confession that all allegations made by the other 
side which such books might have contradicted if 
produced shall be taken to have been admitted. As 
a rule there is now little difficulty in obtaining the 
documents called for. 

RESULTS. — Such, then, very briefly, is the proced- 
ure in New Zealand. It remains to say something of 
the results which have followed its operation. It is 
to be remarked, as a suggestive fact, that the law 
when first enacted was viewed with but little favor 
by the workers of New Zealand. It was true they had 
been very largely engaged in a strike not long before 
which had not ended in success; but yet they looked 
with dislike on the interference of the public, as a 
masterful third party, in any quarrel they might 
have with their employers. For a time nothing was 
done. Nobody from among the ranks of employers 
took steps to register as an association under the 
act, and no labor union did so either. There were 
a few trade disputes going on, and these went the 
old way of strike and lockout. 

At last, however, one labor union, which had 
got the worst of an appeal to force on the one 
hand and dogged endurance on the other, took 
the step of registering itself so as to have an addi- 
tional weapon in its armory for the next occasion. 
Of course, the occasion came quickly, and the 



228 Compulsory Arbitration 

first test of the new law was made. The em- 
ployers treated the court with contempt, and 
found that judgment went against them and was 
sternly enforced by fine until they submitted. Thus 
a beginning was made ; and since then the court has 
never wanted for suitors, nor has there been any 
reluctance on the part of labor unions to register. 
The period of employers' associations being formed 
and registered came later, but that, too, has come, 
and there are few trades in New Zealand to-day in 
which both masters and men are not found regis- 
tered, and so prepared to take advantage of the pro- 
tection which the act affords them. 

The times have been good in New Zealand during 
the last six or seven years, and in most respects the 
market has been a rising one. It was a natural con- 
sequence of this that as a rule the demands of work- 
ers for better wages and shorter hours should meet 
with some degree of success; and such, it must be 
fairly admitted, has generally been the result of ap- 
peals to the court up to this time. It has not been 
so by any means always, however, and cases in 
which the workers have failed have of late been 
much more frequent, owing to the fact that their 
position is already greatly better than it was five 
years ago. In a recent case of some importance, in- 
deed, the appeal to the court resulted in demands 
being wholly refused by the court which the associ- 
ated employers had been prepared to meet half-way 
by way of compromise. 

It need not surprise anybody to learn that while 
the workmen were slow to see any advantage to 



Hugh H. Lusk 229 

them in compulsory arbitration the feeling was 
even stronger and more definite on the part of the 
employers. Not even in America could capitalists 
have viewed with greater dislike and alarm the 
innovation by which the public took into its own 
hands the whole question of ultimate justice be- 
tween employers and employed. At first they 
were disposed to treat it with contempt, as a thing 
that was impracticable, and so they left it to 
labor to take the initiative in calling in the help of 
the new law; but they soon found that, for them at 
any rate, it was workable enough. So long as there 
was anything that could be seized in payment of 
fines, so long it was evident that their choice was 
limited to obeying the court or abandoning their 
business. 

On every side threats were used that capital 
would abandon the country, while, of course, no- 
body would invest a cent in a place so evidently 
foredoomed to failure by its own blunders. The 
threats were unheeded by those in power; and 
gradually they have died away. No manufacture 
has been abandoned ; no trade has been diminished ; 
there never was a time in which capital came more 
readily into the country, or in which steady progress 
and general prosperity advanced so rapidly. It 
would be rash to say that even now the law is uni- 
versally, or perhaps even generally, popular with the 
capitalist class in New Zealand. They have accep- 
ted it, and no longer either denounce or fight against 
it, however, and a good many of the largest employ- 
ers now express themselves as strongly in its favor. 



230 Compulsory Arbitration 

One thing at least is certain. Its results have ap- 
parently been so favorable in their effect on the pro- 
duction and prosperity of the country that they have 
induced its neighbors to copy the system. 

It would not have been possible for the capitalists 
of America or England to treat with greater con- 
tempt the experiment of New Zealand four or five 
years ago than did the people of the Australian 
colonies at that time. Associated workers, no less 
than employers, pronounced it an utterly unworka- 
ble fad, which was equally opposed to the best inter- 
ests of both classes, and they contented thems-elves 
with watching, with a supercilious smile, the foolish 
experiment which was so certain to fail. Year by 
year, however, they have found that it did not fail. 
Year by year they have seen trade flourish and man- 
ufacturing energy increase in greater ratio in New 
Zealand than it did among themselves. While they 
have had the usual number of strikes and quarrels, 
paralyzing trade and impoverishing the workers, 
they have seen that their neighbors had no strikes 
and no lockouts. They have also seen that New 
Zealand was becoming more and more an attraction 
to the very best and most skilled of their own work- 
men, because it was not only a country where good 
wages prevailed, but. one in which men were not in 
danger of being suddenly thrown out of work and 
forced to spend all they had saved to keep their 
families from starving in the next labor conflict. 
Less than six years' experience has been enough to 
convert two of the principal colonies of Australia to 
the new experiment, and both New South Wales 



Hugh H. Lusk 231 

and South Australia have lately decided to try how 
New Zealand's experiment will answer among their 
own people. 

On the whole, therefore, it is only justice to say 
that the New Zealand experiment has, in its own 
country, and subject to the conditions for which it 
was designed, been a success up to this time. It has 
put a stop to strikes and lockouts in its own coun- 
try; it has given a new stability to trade, and im- 
proved the position of the workers so much that the 
number of hands employed in factories has very 
nearly doubled itself since the law was brought into 
operation in 1894; it has been the means of vastly 
increasing the products of the labor of the country, 
and, finally, it has gradually reconciled both work- 
ers and employers to its provisions, while it has led 
other and larger communities to imitate a system 
that has done so much for peace and prosperity in 
the land of its birth. 

Underlying Principles.-— Before saying any- 
thing as to the possibiity of extending it to the far 
wider sphere of America it may be desirable to 
emphasize one or two principles which, as they 
lie at the very foundation of the system, cannot be 
ignored in considering its applicability to any other 
country than that in which it began. The most 
important of these is the principle that the interests 
of every class in a community are regarded by 
the political reformers of New Zealand as second- 
ary to those of the people as a whole. Thus, if 
it appears that one class is obtaining wealth by 
virtue of its possessing greater capital or greater 



232 Compulsory Arbitration 

knowledge of business than other classes, to an 
extent which is injurious to the prosperity and 
well-being of those other classes, and through them 
to the public, the New Zealand theory of govern- 
ment is that means should be taken by legislation to 
control this inequality. It is no answer at all in 
New Zealand to a complaint that manufacturers are 
growing very rich while workmen continue poor, 
that it is the inevitable result of inequalities of po- 
sition in the social scale which gives one man capital 
and training in business and many men only their 
hands and natural intelligence. The reply there is 
that it is not good for the people at large that such 
disparities should be encouraged, and, therefore, if 
the capitalist is making too much out of his business 
in proportion to the workers' share, the public thinks 
itself not only justified but bound to step in and as- 
sist in remedying the evil. 

The same principle applies to that much-abused 
word, liberty. In New Zealand workmen will not 
be heard when they assert that they are free to do 
as they please about working or refusing to work. 
The reply is that there is no such freedom in any 
community of civilized men. If men are free to re- 
fuse to work unless they get just such wages as they 
think they would like to get, they must also be free 
not to work at all; and experience shows that such 
liberty means of necessity misery to others, loss and 
injury to the people at large, almost inevitably vio- 
lence and robbery and a heavy burden cast on all 
other classes of the community. If any class of so- 
ciety is at liberty to take a course which leads to 



Hugh H. Lusk 233 

such results as these, so also is each individual, and 
not freedom, but anarchy, is the result. 

The New Zealand theory is that classes of men 
have no greater rights than individual men, and that 
neither one nor the other can have a right to injure 
the well-being of the majority of the community by 
entering on a struggle for their own advantage in- 
stead of submitting to the decision of some third 
party representing the interests and justice of the 
whole people. This, they say, is the foundation of 
law in every civilized country; and there is nothing 
more arbitrary in refusing to allow individuals who 
hold the well-being of large numbers of their fellow- 
citizens in their keeping, or labor unions that prac- 
tically control the production of the country, and 
through it the well-being of the people, to exercise 
arbitrary discretion as to what they shall do or cease 
from doing, than in refusing to allow two individuals 
to settle their differences by single combat. It is 
this right of interference and ultimate control which 
is claimed by the majority of the people of New Zea- 
land, and is exercised by them in the compulsory 
arbitration system of the country, that lies at the 
root of the whole question. If there is such a right, 
inherent in society for self-protection, they claim that 
their system is right; if there is no such right, then 
they claim that all the system of compelling Individ- 
uals to seek protection from the law instead of at the 
hands of violence is wrong and oppressive. And if 
their principle is right, they claim that it and it alone 
will in the end be successful. In such a case the only 
really legitimate question is : How can it be applied? 



234 Compulsory Arbitration 

Application to American. Conditions. — And 
this leads me to say a few words as to the ques- 
tion of its possible value for present application 
to American conditions. For several years I have 
studied with deep interest and, I will confess it here, 
with a good deal of misgiving as to the future, many 
of the social and industrial conditions of this great 
country. I have admired, with no stinted admira- 
tion, its enterprise and energy, and the marvellous 
results which these have secured in so short a period. 
What I have not admired have been the social and 
political evils that seem to me to be proceeding with 
a growth that is quite as vigorous as the develop- 
ment of the country in other and more worthy di- 
rections. The root of these evils seems to me to be 
found in the rapidly widening gulf between the 
classes of the rich and the poor — or, in other words, 
between the capitalist and the workman. There 
was a time, apparently not so very long ago, when 
the line that divided these classes was one which was 
not hard to pass, and thousands of the capitalists of 
to-day have undoubtedly risen from the ranks of the 
workers. 

Conditions, as you must all know, have changed, 
and are changing still more; and if things go on 
as they are going now the time cannot be distant 
when the line will be as hard to pass in America 
as it has long been in Europe. It appears to me 
that few greater misfortunes could befall this land 
and its people than this. There was a time when 
those who had the good things of this world might 
look on such a state of things with a selfish com- 



v> 



Hugh H. Lusk 235 

placency indeed, but that time is very nearly gone 
by. The salvation — the only possible salvation — of 
a wealthy class in the future among civilized men 
will be the well-being of all the classes which are a 
little less fortunate than itself, and the consequent 
ease with which those below the line of wealth can 
hope to rise above it. To secure this I am convinced 
an appeal will require to be made to a high standard 
of public interest, and not to even the enlightened 
selfishness of the people directly interested on one 
side or the other. For this reason I entirely believe 
in the principle of the New Zealand law. It repre- 
sents the public interference in trade disputes for the 
common interest of all classes; and it represents 
more than this. It is the recognition of the princi- 
ple that society is charged, for its own protection, 
with the duty of seeing that justice is done to all 
classes of its people, even to the extent of discour- 
aging the growth of riches in one class to the 
degradation of others. 

But while these are my convictions, and also my 
hopes for the future of America, I cannot shut my 
eyes to the fact that it is impossible to apply the 
very best principles to the solution of any problem 
apart from a full consideration of its present condi- 
tions. However anxiously I have looked around for 
some way in which the system of New Zealand 
could be applied here, I have been met by difficul- 
ties that seemed to me insuperable. It is not that 
the workers of America do not at present seek for 
such a solution of the difficulty alone, because 
that also was the case both in New Zealand and 



236 Compulsory Arbitration 

Australia. It is not because capitalists and great em- 
ployers of labor are utterly opposed, as I have no 
doubt they are, to the practical application of such 
a principle of public control of the possible results 
of private enterprise and wealth, for this, too, was 
the case in both the countries of which I have 
spoken. I could look forward to the conversion of 
the workers from vain dreams of an absolute su- 
premacy of labor, when labor should take the place 
of capital and yet progress remain possible, for the 
logic of events may be trusted to convert even en- 
thusiastic believers in an impossible Utopia. I 
could hope for the arrival of the saner mind of the 
capitalists also, when they saw — and they will see 
more and more — the increasing danger of class feuds 
in a nation of men of intelligence. 

What I cannot see at present is how to imagine 
a court in America which should not be under 
the influence of the wealthy class, to which its 
members would belong; or, if such a court could 
be set up, how it would be possible to induce the 
class of the workers to trust in its justice. There 
are many other great and, for the present, almost 
insuperable obstacles, but this — which is the direct 
result of the widening gulf between classes to which 
I have referred already — seems to me the worst of 
all. I make no charge against American judges, 
except the one which may not be their fault at all, 
that they do not, in matters already within their 
jurisdiction of greater breadth and more untram- 
melled discretion, command the confidence of the 
mass of the people. 



Hugh H. Lusk 237 

I believe that here, as everywhere else, the settle- 
ment of trade disputes must in the end come to be 
the act of the whole people, acting through some 
kind of unbiassed court, and that the country which 
is the last to recognize this will fall behind in pros- 
perity to the detriment of every class of its people; 
but I also believe that the people of America are not 
ready for it yet. They have still to try other sub- 
stitutes for it, which may be of at least partial and 
temporary advantage. They have still to learn by 
experience that even if these improve matters they 
will bear more improvement still. 



COMPULSORY ARBITRATION 

Order of Railway Conductors 
by e. e. clark 

IT is the disposition of the employer to secure the 
services of employees at rates of compensation 
and under conditions of employment least expensive 
to the employer. It is the disposition of. the em- 
ployee to secure the highest compensation and the 
most favorable conditions possible. Out of these 
natural, and naturally conflicting, desires grows the 
situation which is termed the conflict between 
capital and labor, and which is sometimes spoken of 
as an irrepressible conflict. 

The desires mentioned are a part of human nature, 
and an effort to secure those desires is in accord with 
the first law of nature. In years gone by the em- 
ployer has been disposed to say: " You are my 
servant. I am master. If you do not like the con- 
ditions and the compensation fixed and granted by 
me, you are at liberty to seek employment else- 
where." The employee said in turn: " We must 
have more pay or certain changed conditions of 
labor." 

Possibly the views of the situation from the em- 
238 



E. E. Clark 239 

ployees' standpoint were ex parte, and possibly their 
demands exceeded the limits of justice and reason. 
The employer was wont to answer the demand with 
a flat refusal, and thus the two interests became ar- 
rayed against each other diametrically, and instead 
of coming together to reason the subject to a logical 
conclusion, each would seek to intrench himself in a 
position which promised advantage and gave hope 
of ultimate success. 

If the employer and his employees, one repre- 
sented by the officers in charge, the other by the 
committee, and, if necessary, the officers of their or- 
ganization, would draw closely together and sit 
down in a friendly, dispassionate, and considerate 
way to discuss the situation, in nine cases out of 
every ten they would reach a common understand- 
ing acceptable to both. Each must learn -to respect 
the rights and feelings of the other. 

Employees are naturally much better satisfied and 
much more content working under conditions which 
they have had a voice in fixing than under those ar- 
bitrarily imposed by the employer and probably not 
properly understood by the employees. 

Organization on the part of both employer and 
employee should be as perfect as possible. Each 
should be dominated by a desire to be fair and to do 
right. If such organization existed the arbitrarily 
disposed and hot-headed employer who resents the 
idea of his employee presuming to question the con- 
ditions fixed by him in the conduct of his own busi- 
ness, and in his own way, would, by virtue of being 
controlled by the regulations of the employers' 



240 Compulsory Arbitration 

organization of which he was a member, or by the 
more calm and cooler judgment of the lawfully con- 
stituted majority within such an organization, be re- 
strained from precipitating trouble, which, when it 
was over, could, by careful analysis, be shown to 
have no real cause other than a foolish or unreason- 
able determination to uphold personal or official 
dignity. 

It is not to be wondered at that in connection 
with the determination of the employee to have a 
voice in fixing the conditions under which he is to 
labor, his efforts to assert and maintain that right, 
and the disposition of the employer to deny and 
withhold that right, some serious friction is created 
and some serious conflicts occur. These have been 
undoubtedly necessary to the working out of this 
problem, however regrettable their occurrence may 
have been. 

New lessons have been learned from every in- 
stance of that kind. The conditions are growing 
better year by year. Employers, partly from a 
desire to be fair and considerate with their em- 
ployees, and partly because the conviction that it 
is good business to be so has been forced upon them, 
are showing a willingness to concede to their em- 
ployees the right to a voice in fixing mutually ac- 
ceptable conditions of employment. 

Employees are realizing more and more the re- 
sponsibilities resting upon them and the necessity 
for their being just and fair with their employers, as 
well as considerate of the rights of others, which 
must always be involved, to some degree, in a seri- 



E. E. Clark 241 

ous conflict between an employer and any large 
number of employees. 

Employees are realizing more and more that a 
mere test of strength does not really settle any vital 
principle, and that the defeated one, instead of be- 
ing convinced, simply submits through force of cir- 
cumstances and bides his time, consoling himself 
with the knowledge that he has inflicted sore injury 
upon his opponent and with the hope that some- 
time his day will come. 

The practice of employer and employee meeting 
on even terms and in a friendly and conciliatory spirit 
for the purpose of intelligent and frank discussion 
of these matters is, therefore, the rational, reasona- 
ble, and civilized way of dealing with this question. 
If that way be adoptedjjlhe next and natural step is 
a friendly agreement to submit to arbitration such 
disputed points as the principals are unable to reach 
an agreement upon. If the proper spirit is enter- 
tained at the start and exercised during the discus- 
sions, there can be no fear of anything occurring to 
seriously mar the pleasant relations or to prevent the 
matter being carried to the logical conclusion of 
negotiations carried orfin that spirit — arbitration. 

If each knows at the outset that such points as 
cannot be agreed upon are to be submitted to arbi- 
tration, they will be much less liable to assume or 
maintain any position which their conscience and 
better judgment tell them is wrong and untenable. 
Simple fair-mindedness as between man and man 
will be the basis of the negotiations and the founda- 
tion stone of the conclusion finally reached. 
16 



?4 2 Compulsory Arbitration 

I know that much has been said on the subject of 
compulsory arbitration. My idea of the principle 
of arbitration is the friendly submission of disputed 
^points between two or more parties to an outside 
party, in the selection of which the disputants have 
equal voice, and whose decision it is agreed in ad- 
vance shall be final and conclusive. In order to 
have arbitration in the sense that I see it, each dis- 
putant must feel confident that his interests are go- 
ing to receive the same consideration that is shown 
to those of his opponent, and must have an abiding 
faith that the award will be rendered in a spirit of 
perfect fairness. It does not seem that these feel- 
ings or convictions could be entertained under com- 
pulsion, and it is also difficult to see how employees 
in this country could be compelled to submit their 
differences with their employers to arbitration and 
be forced to continue in employment pending the 
finding of an award, without seriously conflicting 
with the provisions of the Thirteenth Amendment to 
the Constitution of the United States. 

Much has been said and written on the subject of 
the power of legislatures and of the courts in this 
direction. In my judgment an effort on the part of 
legislatures or courts to compel arbitration would 
result in more harm than good, and in ultimate 
failure. There is, in this land, an influence more 
potent than that of the legislature, and a court 
higher than those established by legislative enact- 
ment. That influence and that court is public 
opinion. 

When public sentiment generally demands the en- 



E. E. Clark 243 

actment or the enforcement of a law, the law will be 
enacted and will be enforced. When public senti- 
ment generally is against any law that is on the 
statute-books, that law will surely become a dead 
letter, and any effort to enforce it will result in its 
being repealedfj 

I am an optimist on this subject. I believe that 
the principle of arbitration as a means of settlement 
of industrial disputes is gaining ground just as surely 
as Western Hemisphere civilization is making pro- 
gress. I believe that the convictions of those most 
directly interested in industrial disputes are influ- 
enced very largely by the opinions and sentiments 
of the great public. I have an abiding faith in the 
good judgment and the fair-mindedness of the large 
majority of the people. I believe that the judgment 
of the large majority will be invariably right if they 
properly understand the question. 

The Order of Railway Conductors, which organi- 
zation I have the honor to represent, has pronounced 
emphatically in favor of arbitration in industrial 
disputes. 

The organization has a protective policy, and 
under certain justifiable conditions would not hesi- 
tate to indorse a strike; but it will not resort to that 
extreme except in defence of simple right or of a 
principle, and then only as a last resort, and after it 
has been found impossible to secure an agreement 
to arbitrate the differences. 

The order has heartily co-operated with the other 
organizations of railroad employees in the operating 
department by encouraging in every possible way a 



244 Compulsory Arbitration 

disposition to adopt arbitration as a policy and in an 
endeavor to provide means for extending the appli- 
cation of this principle in so far as has been in our 
power. 

We have submitted a good many cases and dis- 
puted points to arbitration, and our experience has 
been such as to commend the employment of that 
agency in settling such disputes. 



COMPULSORY ARBITRATION 

The Coal Miners 
by john mitchell 

REPRESENTING an industry that has possibly 
through its strikes attracted the attention of 
the American people more than any other industry, 
I feel that the impression has been conveyed to the 
public that the coal miners of America, or the coal 
miners' organization, has not kept pace with the 
times; that they have not adopted progressive and 
humane methods of adjusting their wage differences ; 
and that they still favor strikes alone as a method 
through which they can secure redress for their 
wrongs. This is not the fact. 

For over ten years the United Mine Workers' or- 
ganization has advocated and favored an adjudica- 
tion of differences by conciliation and arbitration 
rather than by resorting to strikes. In fact, there 
has not been one great strike in the mining industry 
that the miners have not tried to avert by applying 
the principles of conciliation and arbitration, and 
the responsibility for our failures to adjust our dif- 
ferences by conciliation and arbitration does not rest 
with the United Mine Workers of America. 

245 



3 



246 Compulsory Arbitration 

In our recent contest in the anthracite coal fields 
of Pennsylvania, the mine workers' organization ex- 
hausted every honorable means to secure justice be- 
fore advising the miners to strike. And this was not 
a strike of organized labor alone; at the time the 
strike was inaugurated less than eight thousand of 
the one hundred and forty-two thousand five 
hundred persons employed were members of our 
organization. Notwithstanding the fact that we rep- 
resented so small a percentage of the total number 
of employees, we went to the employers and re- 
quested them to meet us in conference and to apply 
the principle, "Come, let us reason together"; but 
they, sincere in their belief that their men would 
not strike and claiming that their employees had no 
grievances, refused to treat with our organization, 
refused to meet their employees in joint conference, 
and, as a consequence and as a last resort, a strike 
was inaugurated which attracted the attention of 
more people and involved more men than any other 
strike in the history of our country. 

Arbitration has been advocated by many eminent 
and worthy people for many years, but I am glad to 
note that the advocates of compulsory arbitration are 
growing fewer with each succeeding year, and that 
there is a corresponding increase in the number of 
those who favor voluntary arbitration. Arbitration, 
to be practical, to be beneficial, must be entirely 
voluntary. Compulsion and arbitration are in them- 
selves contradictory terms; there can be no real arbi- 
tration that is compulsory, and were the people of our 
country forced to agree that arbitration should be- 



John Mitchell 247 

come compulsory, that penalties should be inflicted 
upon either the employed or the employing classes 
for a failure to accept the award of a board of arbi- 
tration, it would destroy every principle of free 
government, and I am free to confess that I know 
of no method by which compulsory arbitration could 
be adopted which would not mean the imprisonment 
of those who refused to accept the decisions of 
boards of arbitration, providing they were unable or 
unwilling to pay fines. 

State boards of arbitration, created by our legisla- 
tures, have been tried in many of the States, and I 
believe that much good has been accomplished by 
such boards; but I am satisfied that they have ac- 
complished good while acting as boards of concilia- 
tion rather than as boards of arbitration. 

In the State of Illinois we have a State Board of 
Arbitration, through whose efforts many strikes have 
been averted and many others have been settled, and 
I believe that in a majority of cases this result was 
attained by the board exercising their power as con- 
ciliators, s 1 am of the opinion, however, that the 
best and most practical plan that could be adopted 
to avert strikes and lockouts would be for the em- 
ployers of labor and the representatives of labor or- 
ganizations to meet in joint conference, as is done 
by the soft-coal miners and operators of this country, 
and mutually agree upon contracts governing the 
scales of wages and conditions of employment, said 
contracts or agreements to last for one or more years. 

One of the peculiar features of the coal industry 
(and I believe this statement would apply with equal 



248 Compulsory Arbitration 

force to any other industry) is that where there is no 
organization of employees many strikes occur, and 
where the employees are thoroughly organized 
strikes have been reduced to a minimum. Some 
years ago, and before the miners were well organ- 
ized, at the end of each scale year the miners would 
meet in convention by themselves and formulate a 
scale of wages and present it to the employers and 
ask them to accept it; if they refused to do so, a 
strike would result, which continued in effect until 
the operators acceded to the demands of their em- 
ployees or until the employees were forced to with- 
draw their demands themselves. At other times the 
mine owners would make demands upon their em- 
ployees for reduction in wages, and if the employees 
refused to accept the proposition of their employers 
the mines were closed and the men locked out until 
the employees were forced, by reason of their in- 
ability to live without work, to accept the conditions 
of employment offered by the mine owners, regard- 
less of whether the amount offered would afford 
them enough on which to live and support their 
families. 

But during the past few years, and as a result of 
severe punishment inflicted upon both operators and 
miners, we have realized that the better plan to ad- 
just our differences and formulate our wage scales is 
by meeting together, like prudent business men, 
and staying together until we reach an agreement. 

In formulating agreements between the miners 
and mine owners of the bituminous coal fields 
neither side has any advantage in our conference. 



Tohn Mitchell 249 

One side is as strong as the other, and no agreement 
can be reached until both the miners and operators 
jointly agree and unanimously vote in favor of the 
agreement. 

As a result of years of experience in the trade- 
union movement I have become fully convinced 
that industrial disturbances have more frequently 
occurred because of the refusal or failure of em- 
ployers and employees to know one another, and 
to know one another's business, than for any other 
reason. 

I can remember well when I was quite a young boy 
and just becoming active in the labor movement, that 
I looked upon the man who owned a coal mine as my 
natural enemy, simply because he owned a coal 
mine; and I recall quite well an instance wherein I 
was debarred from a conference of miners and oper- 
ators, by the operators, simply because I was re- 
garded as a labor agitator, having attended a few 
more conferences and addressed a few more meet- 
ings of miners than many of the other delegates who 
were there; but those days have passed, and the 
men I regarded then as my natural enemies, simply 
because they were coal operators, I have grown to 
respect, and while they differ with us, I believe that 
they are sincere in their opinion, and I believe that 
the mine owners have grown to know and respect 
the opinions of the miners and to realize that each 
party to this great industrial question has rights as 
well as obligations which the other must respect; 
and if all employers of labor and all associations of 
labor would meet and reason together, the public 



250 Compulsory Arbitration 

would have less cause to fear industrial eruptions 
and disturbances. 

If arbitration is to be the final refuge to which 
capital and labor shall turn for a solution of the in- 
dustrial problem, it is my opinion that the most 
effectual and practical plan would be to have boards 
of arbitration formed within each separate industry. 
I believe that in the mining industry, for instance, 
a board of arbitration should be selected represent- 
ing the mine employees and the mine owners; and 
that questions that cannot besettled in joint confer- 
ence of employers and employees should be referred 
to said board of arbitration, and in the event of their 
failure to agree, they be empowered to call upon 
some disinterested person who would be authorized 
to pass final judgment. 

Of course, I am aware that it has been asserted by 
large employers of labor and others that labor or- 
ganizations are not responsible for their member- 
ship; that they are not financial institutions and 
consequently are not obliged or compelled to accept 
the award of voluntary boards of arbitration ; but it 
is my experience that there is no labor organization 
strong enough, that there is no corporation repre- 
senting capital powerful enough, to withstand or op- 
pose a properly aroused public conscience. During 
our recent contest in the anthracite coal fields I re- 
peatedly declared in public addresses that notwith- 
standing the weakness and the poverty of the men, 
and the wealth of the great corporations controlling 
those coal fields, even they were not strong enough 
to stand out against the fair requests of their em- 



John Mitchell 251 

ployees, providing the American people said that 
the employees were right. 

I believe that the American people always want to 
do right; I know that if they are properly informed 
their verdict will be in favor of him who is right. In 
the anthracite strike the American people, the 
American clergy, the American press declared that 
the miners were right and the operators were wrong ; 
and as a result the operators were compelled to give 
way by force of public sentiment. This more than 
convinces me that the formation of boards of arbi- 
tration within the separate industries themselves 
would do much to solve this great problem which is 
now attracting the attention of the people more 
than any other one question before us. 

It would be much better for all concerned if capi- 
tal were organized in associations the same as labor, 
for the purpose of treating with organized labor in 
forming contracts and agreements governing the 
conditions of employment. The Association of 
Operators in Illinois has contributed its full share to 
prevent strikes and lockouts; and if the operators 
of all other coal-producing States would form asso- 
ciations similar to that of Illinois, and then all of the 
States form one national association of operators to 
treat with our national association of miners, I be- 
lieve that strikes in the coal industry would become 
almost an impossibility. 



COMPULSORY ARBITRATION 

The Innocent Public 

by john m. stahl 

IT is a well-known fact that frequently in war the 
non-combatants suffer almost as much as those 
in the field. In labor wars it is frequently the case 
that what has been well termed "the innocent pub- 
lic " suffers almost or quite as much as the belliger- 
ents. Of the innocent public the farmers constitute 
the most considerable part, whether the number of 
employers, the number of laborers, the capital used, 
or the labor employed be considered. 

More than twice as much actual capital is em- 
ployed in farming as in any other industry in this 
country. And while, for example, the debt of rail- 
ways equals their capital stock, and iu some cases 
the debt fully equals the value of the roads, farmers 
are in debt for less than ten per cent, of the value of 
their property. The gross earnings of all the rail- 
ways of the country are less than one half the actual 
product of our farms. 

The capital employed in manufacture is only one 
third of that employed in farming,' and the laborers 
are an even less fraction. All the capital of our na- 

252 



John M. Stahl 253 

tional banks is only three per cent, of the capital of 
farmers and only one fourth of the annual products of 
our farms. The value at the mine of all the coal 
produced in this country in 1899 was less than one 
third of the value on the farm of the corn crop 
alone. Farmers constitute by long odds the most 
important class of the public, innocent or otherwise, 
whether capital or labor, employer or laborer be 
considered. 

It is apparent that the farmer has a right to claim 
consideration as a part of the innocent public ; and 
if we emphasize the innocent, the rightfulness of that 
claim becomes all the more apparent, for while farm- 
ers are the greatest employers of labor in the coun- 
try, and while farm laborers are the most numerous 
class of laborers in the country, in all our history 
there has not been a lockout or a strike on the farm, 
and in all our history it has never been necessary to 
call out the militia, much less the troops of the 
regular army, to suppress a riotous mob of farmers 
or of farm laborers. 

Therefore we farmers have the best right of all to 
be the spokesmen of the innocent public in asking, 
Has the innocent public no rights that those respon- 
sible for lockouts and strikes are bound to respect? 
Are urban employers of labor and urban working 
men not subject to what the writers on government 
agree is an obligation of all that enter into the social 
relation and enjoy its benefits, to recognize and re- 
spect certain rights of their fellow-members of or- 
ganized society; or are they privileged to take 
whatever forcible measures they choose, though die- 



254 Compulsory Arbitration 

tated by passion and prejudice instead of justice and 
reason, and pursue their course regardless of the 
hurt they may do to others? 

Are urban employers of working men and those 
working men subject to the fundamental obligations 
of the members of society and the beneficiaries of 
government, or are they superior beings free to en- 
gage in labor wars that involve large loss and great 
inconvenience to thousands of others, the denial of 
liberty, of lawful action to those willing to work, 
and the occasional clubbing or shooting down of 
citizens by those hired by employers or those in 
sympathy with strikers, thus taking from others 
what has been asserted to be "certain inalienable 
rights of life, liberty, and the pursuit of happiness ' ' ? 

There can be but one answer to these questions: 
the innocent public has rights. There should be no 
lockout or strike without ample cause, and not be- 
fore all reasonable means have been tried to settle 
the dispute that threatens it. This would be the 
answer of farmers to those questions. 

And as we have seen that the farmers have the 
best right of all to put these questions, it is also true 
that they, being in greater degree than any other 
class both employers and employees, are in a posi- 
tion to seek an answer with the least bias and 
prejudice. 

But from the answer we give to these questions, 
it must not be inferred that we favor compulsory 
arbitration or other forcible outside methods of 
settling labor disputes. We do not favor them. 
Probably this is chiefly due to our belief that they 



John M. Stahl 255 

are impracticable, and many of us believe that they 
are unnecessary. There seem to be grounds for the 
contention of some that compulsory arbitration, at 
least if it decided that strikers must go to work, 
would be unconstitutional. But there is a yet 
higher law in this country — public opinion enforces 
or nullifies laws. Positive public opinion favorable 
to a law is necessary to its enforcement, and to 
create such a public opinion favorable to compulsory 
arbitration would take more effort than is needed 
to make a public sentiment that will settle labor 
troubles and avoid labor wars by other means. 

Individually I believe that every one, rich or poor, 
should diligently engage in useful employment. If 
he will not do this willingly he should be compelled 
to do it. No one has a right to be a burden on so- 
ciety or even a presumptive burden on society. We 
ought to put to work every idle person capable of 
work, in cleaning streets, building roads, making 
dams and ditches for irrigation, and digging ship 
canals. 

But I know how useless it is to expect the Ameri- 
can people, so jealous of individual rights, ever to 
enact and enforce a law to compel the willingly idle 
to work for the public; and how much less will that 
public enact and execute a law compelling those that 
are idle, not to work for itself, but for some indi- 
vidual or corporation with whom these idle laborers 
are in bitter dispute, and about the very matter of 
laboring. Farmers do not believe that compulsory 
arbitration is the best solution of labor troubles, 
even in quasi-public employments. 



256 Compulsory Arbitration 

What, then, is the best solution of labor troubles 
and the one the innocent public has a right to de- 
mand shall be fairly, earnestly, persistently tried in 
every case? The experience of the National Stove 
Makers' Defence Association and of the Stove 
Moulders' Union of America gives the answer. To 
a lesser degree, because it is of shorter duration, the 
experience of the coal mine operators and miners of 
Illinois gives the answer. So, too, the experience 
of many individual employers and their employees 
gives the answer. I will not enter into details. I 
will say briefly, however, that this plan is simply to 
bring employers and employees together in confer- 
ence when a labor dispute develops, the men keep- 
ing at work pending adjustment. Not employers, 
laborers, or the innocent public suffer. It is cer- 
tainly necessary that employers and their workmen 
should meet, by their representatives, in conference 
as reasonable men, believing that they may possibly 
be wrong and the others right ; and it would seem 
that it is very desirable, if not necessary, that there 
be a strong organization of both parties, especially 
of the working men. 

Now here is where the innocent public may make 
itself felt. If made to understand the fact that a 
lockout or strike that occasions it a great incon- 
venience and a loss of millions of dollars is probably 
a crime against it, occasioned by arrogance or stub- 
bornness and ignorance, public sentiment will so 
heartily, generally, bitterly condemn the men re- 
sponsible for a lockout or strike that such occur- 
rences will be very rare. 



John M. Stahl 257 

The cynic may talk to the contrary, but public 
sentiment is very powerful in this country. Let 
the public understand that it is grievously imposed 
on by a strike or lockout ; that for years strikes and 
lockouts have been avoided in one of our important 
industries by employers and men simply getting to- 
gether as men respecting each other to discuss their 
grievances, — and public sentiment will force em- 
ployers and men in other industries thus to settle 
their difficulties. 

Strong organizations of employers and laborers 
will aid greatly, if they are not necessary, for they 
will restrain the hot-headed and reckless, who are re- 
sponsible for lockouts and strikes. Also, if both 
sides are well organized they are more apt to respect 
each other, and therefore to enter into conference 
and in a reasonable frame of mind that does not 
preclude. just concessions. Our labor organizations 
are now guided and controlled in general by men 
who are more intelligent, broad-minded, reasonable, 
and conservative than the mass of the organizations. 
Because of this and the respect in which strong or- 
ganizations are held by employers, those laborers 
that are best organized are least often concerned in 
strikes and lockouts. It is a new or imperfect or- 
ganization that is most often concerned in a strike 
or a lockout, and it is the organization strong in 
number and years that rarely has to deal with a 
strike or a lockout. This is a fact we may well give 
the most careful consideration. It is a fact that very 
largely justifies labor organizations and that may aid 
much in determining the plan to avoid labor wars. 



258 Compulsory Arbitration 

Because of this fact farmers, such an important 
part of the innocent public, are favorable to labor 
organizations; and because of the further fact that 
such organizations when wisely led are, by making 
their numbers more intelligent and cultured, the 
most powerful agents in raising the plane of living 
of city working men, hence of increasing their wages. 
And this means better demand and higher prices 
for farm products. True, it also means higher prices 
for what we farmers have to buy. But as the great 
majority of farmers sell more than they buy, they 
have a net gain because of the prosperity of working 
men and all other classes in the city. Therefore, 
irrespective of the losses often inflicted on them di- 
rectly by lockouts and strikes, farmers are opposed 
to those labor wars that inflict such severe losses on 
the public and lessen the general prosperity. 



VOLUNTARY ARBITRATION 

Experience in the Building Trades 

by otto m. eidlitz 

I WILL endeavor to call attention to a few condi- 
tions which, could they be eliminated, or at 
least improved, would greatly change the entire sit- 
uation as it generally exists to-day between the 
employer and employed and make for peace and in- 
telligent discussion. 

The glaring fault that immediately arrests one's 
attention is the remarkable apathy of the majority 
of those interested on both sides. The meetings of 
both employers and employees are poorly attended, 
and the business is perforce transacted by a limited 
number. This inevitably leads to ring rule, and in 
many cases to the forcing of the opinions of the few 
on the conservative majority who do not attend or 
leave too soon. (Cure for this evil — penalize for 
non-attendance.) 

It is of prime importance that the employers and 
employees should each be thoroughly organized and 
take an active interest in their organization. This 
will insure mutual respect, tinged with apprehension, 
which is absolutely vital. Weakness on either side 

259 



260 Voluntary Arbitration 

appeals to the selfish instinct of man. In the case 
of the employer, he, knowing the union to be torn 
by internal strife, is apt to allow pocket judgment to 
temper justice, while on the other hand the union, 
recognizing that their employers' association is 
poorly organized, will resort to guerilla warfare, 
often without warning, and attack each firm singly, 
or take one or two at a time, instead of settling the 
question in which all are interested by discussion 
and arbitration. 

The employers' association and the journeymen's 
union ought to be incorporated by law so that equal 
responsibility would obtain. Much time, effort, and 
money is frequently wasted by a trade-union refus- 
ing to abide by the decision of an umpire who has 
been selected by their representatives in the case. 

A yearly agreement should be entered into stipu- 
lating clearly what the trade conditions shall be, and 
a standing arbitration board created with equal rep- 
resentation from both sides, said board meeting 
monthly to adjust any grievances which may arise. 
An important clause of this agreement should be that 
neither side will inaugurate a strike or lockout until 
the matter in dispute has been brought before the 
joint board for settlement. The proceedings of this 
board should be reported stenographically and a 
typewritten copy forwarded to the individual mem- 
bers of the board. The arguments and decisions 
thus made when read at the next regular meeting of 
those interested are heard by the rank and file, and 
they help to clear up imaginary or real grievances, 
and go far toward disabusing the employee's mind 



Otto M. Eidlitz 261 

of the fallacious opinion that the employer is his 
natural enemy. 

Fair and honest ventilation of important questions 
in the public press would materially help to arouse 
a general interest and educate the conservative 
elements on both sides. 

An arbitration board to settle trade difficulties 
should always be composed of the employers and 
employees of that or a kindred trade. This insures 
the understanding of technicalities which arise, mis- 
interpretation of which may affect the judgment of 
the arbitrator, particularly if he is averse to asking 
questions. The representatives of labor should be 
workmen actually or recently employed, and should 
not be the walking delegates or business agents. 
The function of the business agent is to look after 
the interests and to bring the complaint to the at- 
tention of his union. It is his province to appear 
before the board and by argument and witnesses to 
prove his case and act as prosecutor, but if the ar- 
bitration board is composed of his fellow business 
agents, the trial is apt to be a failure. A business 
agent or walking delegate is absolutely necessary for 
the welfare of the union, but his sphere of action is 
indicated by his duties, and he should never be al- 
lowed to act in the dual capacity of judge and 
attorney. 

Thus, having a standing arbitration board, of 
which the individual members should be most care- 
fully selected, and whose proceedings are public 
property, precedents are established and dissemi- 
nated which would unquestionably help to make its 
work effective. 



262 Voluntary Arbitration 

One of the exasperating conditions which all em- 
ployers meet in dealing with their employees is that 
the arbitrator for the labor side has no power. It is 
understood that before taking the final vote he must 
report back to his union for instructions, and thus 
justice is sometimes defeated. The arbitrator him- 
self may be thoroughly convinced and ready to vote 
on the question, but in most instances he is power- 
less to do so, and his vote is often registered in di- 
rect opposition to his own convictions. This is so 
manifestly an injustice to the employer and a reflec- 
tion upon the choice of the union that it bars dis- 
cussion. 

In most instances arbitration boards for the settle- 
ment of disputes between employer and employed 
have been misnomers. They were and are boards 
of conciliation and mediation, and usually there is 
a desperate effort made to adopt some half-way 
measure to heal the breach. The idea that there 
could be a clean-cut verdict affirming or denying a 
request rarely enters the minds of those making or 
receiving the demands. So much of a factor has 
this become that to-day the whole loaf is usually de- 
manded in order that the half loaf may be obtained. 
Real arbitration inaugurated under the conditions 
above mentioned would go far toward correcting 
such abuse of power on either side. In the mean- 
time, should a dispute arise between employer and 
employed and an arbitration board be decided on to 
settle it, the following suggestions may be of service: 

A vote appointing the labor arbitrators with 
power must be obtained. Arbitration papers must 



Otto M. Eidlitz 263 

be drawn up stating specifically the matter in dis- 
pute, and that both sides agree to abide by the vote 
of a majority, or by the decision of an umpire. In 
every case the umpire should be selected before the 
case is opened. These papers must be properly 
signed and sealed by the members of the board, each 
side receiving its copy. Then, after a careful hear- 
ing of the case, stenographically reported, and a 
verdict obtained by a majority vote, or the decision 
of the umpire, it will be found that in most cases the 
result will be accepted and lived up to by both sides. 

A Proposed Plan for the Building Trades. 
— As my experience with labor has been acquired 
entirely in the building industry of this city, I can- 
not refrain from briefly indicating a plan for the gen- 
eral arbitration of its building-trades disputes which 
was very nearly consummated four years ago, and, 
if adopted, would go far toward eliminating the 
sympathetic strike. Although this is specializing, 
this plan contains, I think, the germ for the solution 
of the problem in general. 

As is well known, a sympathetic strike is the 
abandonment of the works by the men who are in 
harmony with their employers for the sake of some 
particular branch who are at variance. The mon- 
strous injustice of this act becomes apparent when 
it is known that in a majority of cases the dispute is 
apt to be one between the unions themselves, and not 
between the members of a union and their employer. 
Jurisdiction over certain work is claimed and com- 
bated by a rival. The introduction of novel feat- 
ures is often claimed by two distinct trades. The 



264 Voluntary Arbitration 

situation is further complicated by the presence of 
two central organizations of all trades where formerly 
there was one. Many of the trades are thus repre- 
sented in duplicate, and there is a struggle as to 
which branch of the same trade shall do the work, 
with the result that sides are taken by the members 
of one central body as against the other. Meanwhile 
the owner and contractor are at their wits' ends, as 
the quarrel is absolutely beyond their jurisdiction, 
and great loss accrues to both sides for the lack of 
some judicial power to adjust these ever-recurring 
difficulties. 

To meet this demand the following plan was pro- 
posed, but failed of a trial because, although ac- 
cepted by the employers' association and the unions 
of one of the central bodies, it was rejected by the 
rival central. 

It is to be remembered that the employers, as 
well as the men, have a central organization known 
as the United Building Trades, 

In general the employers and employees of each 
trade should be organized. The employers should 
have an agreement with their employees and a trade 
arbitration board with their employees where all 
difficulties of that trade can be discussed and ad- 
justed; but in addition thereto there should be a 
higher court or arbitration board, which should be 
known as the general arbitration board, for the set- 
tlement of all disputes, whether they be between em- 
ployers and employees, or employees of the various 
organizations. The plan of the general arbitration 
board which has been sanctioned by the United 



Otto M. Eidlitz 265 

Building Trades, in which the principal employers' 
associations of the city are affiliated, is as follows: 

Each employers' association holding membership 
in the United Building Trades shall elect an arbi- 
trator, who shall serve for not less than six months. 
Each employees' organization of the trades the em- 
ployers of which are represented in the United 
Building 7'rades shall elect an arbitrator, who shall 
serve for not less than six months, and who shall be 
in the employment of the members of the United 
Building Trades at the time of their election. The 
arbitrators from the employees' organizations are in 
no case to act as delegates to the central board ; 
they may, however, serve on the arbitration board 
between employers and employees of the trade to 
which they belong. From this body not less than 
four general arbitrators, two from the employers' 
associations and two from the employees' organiza- 
tions, shall constitute a court of appeals. They shall 
meet within forty-eight hours when notified so to 
do by the chairman of the general arbitration 
board. General arbitrators shall receive a fee from 
the treasury while serving on the board. Re-em- 
ployment by their firm is furtkermore guaranteed in 
the case of employees when the special case on 
which they have served has been disposed of. 

The employees' organization as a whole, or a 
single employees' organization, shall not order any 
strike against the members of the United Build- 
ing Trades, collectively or individually, nor shall 
any number of the employees' organization men 
leave the works or shops of the United Building 



266 Voluntary Arbitration 

Trades, neither shall the employers lock out their 
employees, before the matter in dispute is brought 
before the general arbitration board for settle- 
ment. In those trades, members of the United 
Building Trades, which have trade arbitration 
boards, any difficulty between employers and em- 
ployees of that trade must be adjusted in the arbi- 
tration board of that trade, if possible. In case, 
however, of the continued disagreement, it shall be 
the privilege of either side to apply to the general 
arbitration board before a strike or lockout is re- 
sorted to. 

All complaints shall be first addressed to the 
general secretary of the arbitration board, who shall 
be a paid employee, and shall by him be referred to 
the executive committee of the general arbitra- 
tion board, composed of an equal number of em- 
ployers and employees, and it shall be their duty at 
once to organize a special arbitration board to try 
the same. 

It shall be the privilege of any employees' organ- 
ization to select from the list of general arbitrators 
of all associations and employees' organizations the 
arbitrators they wish to represent them in the case 
at issue ; but in no case shall the arbitrators of either 
the employers' associations or the employees' organ- 
izations serve when the difficulty is occurring in their 
trade. 

The intention was to create a court of appeals, 
composed of representatives from both sides of all 
the trades, whose duty it would be to rule on all 
questions which the individual trade could not 



Otto M. Eidlitz 267 

settle for itself, and thus avoid a general uprising or 
sympathetic action by trades virtually at peace. It 
is perhaps needless to indicate that after a few trials 
precedents would be established which could be 
used to strengthen the position of either side in 
subsequent trials, and would be quoted as in our 
courts of law. 

This is the more apparent as the difficulties arising 
in different trades are often analogous and frequently 
identical. Yet as each trade makes a new or re- 
vives an old proposition, the whole building in- 
dustry is involved in the struggle until one wonders 
whether it is done with malice aforethought or a 
premium is being placed on paresis. 

It may be taken as axiomatic, however, that no 
solution will be found for the problem unless the 
questions involved are agitated and discussed, even 
though the result at first may be insignificant. 
Nothing can be expected from a lack of interest 
and inactivity. The effort that is now being made 
to discuss this question in a general and thorough 
manner is bound to have an effect, and no matter 
how small will be the increment of betterment it is 
worth the effort. 



VOLUNTARY ARBITRATION 

Experience of the Founders 
by h. w. hoyt 

THE industrial problems, so-called, must be ad- 
justed along the line of least resistance, and 
the line of least resistance, in my opinion, is volun- 
tary arbitration. The highest conception of arbitra- 
tion is that of an unbiassed conference board — a 
judicial body composed of arbitrators outside the 
sphere of influence exerted by the contending 
parties. 

Another idea, approaching more nearly the prac- 
tical, is that of a board consisting of equal num- 
bers from the two bodies, with an umpire chosen 
by both. 

Principles of Arbitration. — Each of these 
conceptions of an arbitration board has failed to 
satisfy the parties in interest or to solve and settle 
industrial disputes. The best thinkers, who are also 
charged with the trying duties of practical arbitra- 
tion, have decided that unless satisfactory settle- 
ments can be reached by an equal number of 
representatives of employer and employed without 
an umpire, the conference would better fail. The 
future economist may be wise enough to present to 

268 



H. W. Hoyt 269 

a waiting world some plan of arbitrary arbitration 
acceptable to the wage-earner and wage-payer, but 
we fear that genius is not yet born. 

While waiting for his advent, arbitration will go 
on. Every day we realize that public sentiment is 
crystallizing around that thought. Arbitration in- 
variably means compromise, and unless the con- 
tending parties are prepared to accept this absolute 
fact, the work must fail. 

Everything depends upon the personnel of the 
board. How important that the choice of arbitra- 
tors should fall upon the clearest and deepest think- 
ers, whose vision is not obscured by their prejudices ! 

Questions of difference between buyer and seller 
are as old as mankind, and yet the dominion of 
commerce illustrates how easily adjustments are 
made in that realm. The purely commercial aspect 
of barter and sale is complicated with the human 
element in questions relating to wages, and he who 
would settle the wage problem without taking 
humanitarianism into the account will not serve his 
fellow-men acceptably. The old law of supply and 
demand, strictly interpreted, does not avail to 
adjust all disputes that arise in the economical 
world. The competent arbitrator must acknowl- 
edge this. The employer who admits no other 
rule of action is unwise. 

There has been an infinite amount of trouble in 
conferences for conciliation and arbitration caused 
by insistence upon rules of conduct evolved in the 
lodge room and forming the written or unwritten 
laws of unionism. Equally provocative of trouble 



270 Voluntary Arbitration 

has been the tendency among some employers to 
ignore the wage-earners in the collective capacity. 
Sometime these two great forces will learn that the 
intelligent modification of their respective positions 
will extinguish the causes of what has too fre- 
quently been called an irrepressible conflict. It 
may require a great calamity in the industrial world 
of America to teach us anew some of the truths 
uttered by our forefathers and imperishably pre- 
served in the Declaration of Independence. 

National Founders' Association.— The Na- 
tional Founders' Association is one of the practical 
results of the evolution of modern social economics. 
The fundamental article of its constitution is the 
very embodiment of voluntary arbitration, and reads 
as follows : 

"The objects of this association are : 1st. — The adop- 
tion of a uniform basis for just and equitable dealings 
between the members and their employees, whereby the 
interests of both will be properly protected. 2d. — The 
investigation and adjustment, by the proper officers of 
the association, of any question arising between mem- 
bers and their employees." 

This association was formed three years ago. It 
now numbers about four hundred members through- 
out the great manufacturing centres of the East, 
Middle West, and West. It employs an army ex- 
ceeding thirty thousand men. One of its earliest 
acts was a joint conference with the representatives 
of the Iron Moulders' Union of North America for 
the purpose of considering an agreement that should 



H. W. Hoyt 271 

form the working basis of a treaty of peace. This 
joint conference agreed upon a plan of arbitration, 
which was subsequently adopted by the rank and file 
of both associations. It was an exceedingly simple 
and effective agreement, by the terms of which 
each body solemnly agreed that there should be 
neither strikes nor lockouts in the foundry industry 
until arbitration had failed to adjust the differences. 
The wise provisions of this agreement have been 
invoked scores of times, with such flattering results 
that neither party could be persuaded to consent to 
its abrogation. 

Averting Strikes. — The National Founders' 
Association is the largest organized body of employ- 
ers in the United States committed to the altru- 
istic object set forth in its constitution. The Iron 
Moulders' Union, on the other hand, is one of the 
largest, best organized, and most intelligently gov- 
erned labor unions in this republic. It is significant, 
therefore, to remember that during the eventful and 
intensely active industrial year of 1899 there was not 
a single disastrous strike or lockout in the foundry 
industry, notwithstanding the conditions were such 
as naturally to provoke wage conflicts. 

These two great associations of employers and 
employees were not as successful in averting all 
contention in the years 1900 and 1901, but the very 
failures have emphasized the necessity and the wis- 
dom of a still closer adherence to the principles of 
arbitration and conciliation, and a more profound 
study and examination of economic conditions. 
. Conferences with Moulders' Union.— Per- 



272 Voluntary Arbitration 

manent results have already been definitely reached. 
It has been found possible for the representatives 
of the two organizations mentioned to meet and 
discuss the principles for which each is contending, 
without the slightest danger of personal animosity. 
Various conferences have been carried on, with a 
strong desire on both sides to reach a common 
ground by the exercise of mutual forbearance and 
concession. Failures to arrive at a harmonious 
decision, even in the face of impending industrial 
conflicts, have not destroyed faith in the success of 
the principle of arbitration. Each party has be- 
come more tolerant of the other. Friendly confer- 
ences, face to face with each other, have destroyed 
preconceived notions of each other's characteristics, 
broadened and deepened the spirit of toleration, and 
gradually paved the way for eventual peace in that 
great industry. 

Nationalizing Arbitration. — An attempt has 
been made to nationalize the scheme of arbitra- 
tion; in other words, to take away from each in- 
dividual case of difficulty its strictly local character, 
and place the adjustment of it in regularly appointed 
committees chosen by both associations, which com- 
mittees, by reason of their experience and broader 
horizon, are able to eliminate the local features and 
arrive at results in harmony with existing and ac- 
cepted conditions elsewhere throughout the country. 
This course of action has gone far toward relieving 
the manufacturer from those petty annoyances 
which he has always associated with unionism, and 
at the same time has elevated and dignified the 



H. W. Hoyt 273 

mission of the local and district officers of the Iron 
Moulders' Union of North America. The conse- 
quence has been that a more experienced, intelli- 
gent, and tolerant body of men have been called 
into action, and that the rank and file of union men 
are rapidly becoming educated to the new method 
of dealing with their affairs individually and collec- 
tively, while the manufacturers have been educated 
to a more liberal and just consideration of their 
employees' interests. 

Foundation of Unionism. — The preamble of 
the constitution of the Iron Moulders' Union of 
North America begins with this declaration : 

"Believing that under the present social system 
there is a general tendency to deny the producer 
the full reward of his industry and skill " — 

Upon this declaration of want of faith in human 
justice is builded, practically, all there is of union- 
ism. The searcher after truth cannot deny that 
there has been much justification for this assump- 
tion. The National Founders' Association has 
expended a great deal of energy in endeavoring to 
bring about a set of conditions which would destroy 
the force of such a charge among its members. 

The association of which I have spoken is a type 
of its class. It is most gratifying to note the suc- 
cess achieved by the kindred organizations. The 
general public is scarcely prepared to accept the 
simplest recital of the history that has been made in 
promoting the principles of arbitration. 

Future Outlook.— What of the future ? 

• As long as the wage-earner believes, or is taught 
18 



274 Voluntary Arbitration 

to assume, that society is in league to rob him, as 
an individual, of some of the purchasing power of 
his services, so long must society reckon with him 
in his collective capacity. The employer who elects 
to ignore this fact is often as much of a menace to 
the industrial peace as is that agitator who plays 
upon the prejudices and inflames the passions of the 
men he falsely serves. But the conditions are im- 
proving on both sides. The progressive manufac- 
turer has learned that a union is not an altogether 
reprehensible evil in social economics, and readily 
admits that when organized wage - earners are 
dominated by strong, conservative men, they will 
meet the employer half-way in arbitration. 

Unions must remember that there never was an 
attempt made to unite manufacturing employers in 
the common cause of treating collectively with the 
relations of labor until the unions themselves had 
asserted their power. Both the employer and the 
employee must be honest enough to concede that 
their interests are mutual, and that the deep prob- 
lems of economics cannot be solved in a decade. It 
is a slow evolution, that cannot be hastened by 
violence or intolerance. All the theories of all the 
wise scholastics on earth are of little avail. There 
is only one certain rule of action. It was long ago 
called the Golden Rule 



VOLUNTARY ARBITRATION 

Experience of a Shoe Factory 

by w. l. douglas 

THE bill establishing a State Board of Arbitra- 
tion in Massachusetts became a law in 1886. 
In December, 1888, I required all of my employees 
as a prerequisite for employment to agree to submit 
all grievances to the State Board of Arbitration, 
both, parties agreeing to abide by the result of the 
decision. This arbitration agreement was indi- 
vidual, except in the case of the Lasters' Protective 
Union, who agreed, as an organization, to leave all 
their grievances to the State Board of Arbitration 
and abide by the decision. 

This individual arbitration worked very well until 
August, 1898, when the cutters went out because I 
changed a foreman, and would not submit their 
grievance to the State Board of Arbitration, which 
they were under obligations to do, according to the 
contract which they signed. Soon after the Boot 
and Shoe Workers' Union made a proposition to 
me that they would give me arbitration, which I felt 
would be of more value than individual arbitration. 

Since then this business has been conducted in 
pursuance of a standing agreement with the Boot 

275 



276 Voluntary Arbitration 

and Shoe Workers' Union regulating the settlement 
of such difficulties as may arise. As a matter of 
fact, there have been very few differences of any 
moment. When one arises that cannot be settled 
in the countihg-room or in conference with the 
officers of the union, it is to be referred to the State 
Board of Arbitration and Conciliation. Member- 
ship in the union is a prerequisite to employment. 
The workman always has access to the employer and 
is never punished for presenting a grievance. 

Such agreement has proved eminently satisfac- 
tory. We believe that many of the strikes and 
much of their bitterness are caused by non-recogni- 
tion of the unions and apparent indifference to the 
true interests of honest labor on the part of the 
employer. 

State Arbitration. — To increase the efficiency 
of State arbitration and conciliation the public com- 
missions having such functions should be modelled 
after the judiciary of States, where that branch of 
the government is not elective. There should be 
such salaries attached to the office of State arbitrator 
as would secure the services of the best men, devot- 
ing all their time to the work. Such commissions 
should have regular sessions at fixed times and 
places and perform circuit work, and should be as- 
sisted by a suitable corps of agents. They should 
have expert assistants, as provided in the Massachu- 
setts law. 

The natural way to reach a settlement is through 
a conference of the parties in interest, and this 
method, known as conciliation, can be applied to the 



W. L. Douglas 277 

great majority of cases. Only refractory cases, 
which are relatively few, should be referred to the 
decision of a non-disputant. The industrial world 
would be a gainer if this distinction were more 
clearly shown in the enactments. 

Compulsory Arbitration. — It appears to us 
that the mixed nature of our population, not yet 
fused, and exhibiting varying degrees of enlighten- 
ment and ignorance on the one side or the other, 
would render any law inoperative that contemplated 
the compulsory reference of disputes arising between 
private parties and their workmen. 

When the employer is a "quasi-public" corpora- 
tion and party to a controversy that results in pub- 
lic inconvenience traceable to some act or omission 
of the employer, the grounds for compulsion appear 
to be more plausible. It might be argued that the 
corporation had failed to serve the public as ex- 
pressed or implied when its franchises were given, 
and that in the absence of competition it should not 
be allowed that fulness or freedom so necessary to 
a private employer in the competitive world of pro- 
duction. On this point, however, we do not care to 
pass judgment. 

Publicity. — According to the Massachusetts law, 
when the mediation of the State Board has failed to 
bring about a settlement, it may, if advisable, make 
public the result of its investigation and say which 
party is, on the whole, more blameworthy or respon- 
sible for the existence or continuance of the diffi- 
culty. Such expressions on the part of a public 
commission having the interests of the whole popula- 



278 Voluntary Arbitration 

tion in mind are calculated to clarify public opinion, 
but they have not, in point of fact, become com- 
mon in this State. To make such procedure com- 
pulsory when any difficulty threatens to paralyze 
industry would, we believe, be premature at the 
present time. 

We do not believe it necessary to compel the ac- 
ceptance of decisions by State arbitrators in existing 
conditions. Arbitration is optional with the parties 
to a difficulty, and when it is invoked each of them 
promises to abide, and invariably does abide, by the 
result. Bad faith in this respect has not as yet be- 
come a serious quantity in the complex problem 
known as the labor question, for we have yet to learn 
of a single instance of it. 

Incorporation of Unions. — The incorporation 
of trade-unions, in the present condition of volun- 
tary arbitration, does not appear necessary to the 
solution of the labor question. We are informed 
that their reason for remaining unincorporated is 
that they do, to some extent, a certain kind of frater- 
nal insurance business. In Massachusetts, by a re- 
cent enactment, they are exempt from the operation 
of insurance laws. 

Educational Work.— We believe that no body 
of commissioners can arbitrate or conciliate without 
accomplishing at the same time a great amount of 
educational work, but the laws creating such boards 
should make a specific provision for the performance 
of so necessary a function. There should be a liberal 
appropriation of funds for the dissemination of suit- 
able literature and for the expenses of agents charged 



W. L. Douglas 279 

with the duty of instructing disputants concerning 
the peaceful way of adjusting difficulties. Religious 
and social leaders, the press, public-spirited persons 
and associations would not fail to second such an 
effort on the part of the State. The results might 
be made the subject of reports, and the public would 
before long be enabled to see that the best effects of 
arbitration and conciliation laws are visible in the 
amount of industrial trouble which has been pre- 
vented rather than in the number of disastrous 
strikes and lockouts that have been settled when all 
concerned have grown weary of their contest. 

It is needless to say that appointment to such 
boards should always be made without regard to 
politics. 



VOLUNTARY ARBITRATION 

Experience of Stove Manufacturers 
by thomas j. hogan 

THE primary cause of labor troubles, and one 
that serves to widen the breach between the 
employer and workman, is their ignorance of each 
other. As a rule neither party seems to appreciate 
the importance of studying each other's interests 
and conditions, to the end that each may contribute 
to their common welfare and the success of the in- 
dustry with which they are identified. The em- 
ployer may be selfish and have no regard whatever 
for his workmen, only in so far as having them pro- 
duce the greatest amount of work at the lowest pos- 
sible wages, or he may know absolutely nothing as 
to the conditions surrounding his workmen, or what 
hardships they have to bear to eke out a mere sub- 
sistence. On the other hand, it sometimes happens 
that the working men, through their connection with 
labor organizations, feel that they are in a position 
to dictate and enforce any kind of terms and condi- 
tions, and they make demands that are arbitrary 
and inconsistent, which, if conceded, would be the 
ruination of any business. 

These conditions leave no alternative and result in 
280 



Thomas J. Hogan 281 

either a strike or a lockout, often causing intense suf- 
fering and irreparable loss to the district where the 
trouble is located. The more prolonged the diffi- 
culty, the more intense it becomes; the men's 
passions become aroused, and, as has frequently hap- 
pened, there is destruction of life and property. 

Plans of Arbitration. — Various plans of arbi- 
tration have been suggested and devised as a means 
of arriving at a peaceful solution of the question. 
National, State, and local boards of arbitration have 
been appointed, but experience has proven that they 
are powerless, and invariably useless in matters of 
this kind. They savor too much of politics to in- 
spire the necessary confidence, and in addition to 
that there is an inborn prejudice on the part of the 
employers of labor, as well as workmen, against the 
interference of outside parties, who have no practical 
knowledge of the points at issue. Each particular 
difficulty needs specific treatment, and a technical 
knowledge of the details is necessary to give it proper 
consideration, and without this knowledge it is im- 
possible to render a fair and impartial decision. 

Compulsory arbitration has been suggested as a 
solution of the question, it being said to be in suc- 
cessful operation in New Zealand. While it may be 
a solution of the problem in that country, it is 
hardly possible that it will ever obtain to any ex- 
tent in this country./ It is opposed to the principles 
of individual liberty, and at variance with the spirit 
of our Constitution to compel men's actions contrary 
to their own will. There is no law that can compel 
a man to work if he does not want to, nor prevent 



282 Voluntary Arbitration 

a man closing down his works if he elects to do 
so. Therefore, the remedy is not in compulsory- 
arbitration. 

Voluntary arbitration would be more acceptable, 
and probably result more satisfactorily than any of 
the other forms referred to, yet there are objections 
to that, if it should require an umpire or referee, as 
there would be more or less difficulty in agreeing as 
to who should act in that capacity. 

British Experience.— In Great Britain, where 
there are many large industries, employing thou- 
sands, notably the iron, lace, and cotton-cloth 
industries, frequent attempts to legislate in this 
direction have ended in failure. Authorities inform 
us that, as far back as the fourteenth century, Eng- 
land made frequent attempts to legislate and make 
laws regulating the hours of labor and the establish- 
ment of a wage rate; but all such attempts were 
futile. It is only within the last forty years that she 
has met with any degree of success, and that has 
been through voluntary arbitration. 

In recent years both sides in nearly every trade in 
Great Britain, the employers as well as the work- 
men, have become thoroughly organized, and, with 
careful and well-planned systems of organization, 
with unlimited funds with which to sustain them- 
selves, tremendous conflicts could be precipitated 
were there no peaceful methods mutually agreed 
upon, binding all concerned, for the settlement of 
their differences. 

National Organizations of Employers. — 
We have in this country to-day a number of large 



Thomas j. Hogan 283 

and aggressive organizations of labor, which, by 
reason of their combined strength, are in a position 
to dictate to the individual employer and impose 
conditions which, if conceded, would endanger his 
business; while, if not conceded, he is confronted 
with a strike, which might tend to the same end. 
Employers are beginning to realize this, and within 
recent years a number of industries of national im- 
portance have become organized among themselves 
for mutual protection and the defence of their mem- 
bers against arbitrary demands and unwarranted or 
unlawful acts of labor. 

These organizations of employers each maintain 
a defence fund, which is being augmented by the 
frequent contributions of its members through as- 
sessments equitably arranged. While these organ- 
izations are in a position to meet any contingency, 
they are not disposed to coerce labor nor are they 
in any way opposed to labor organizations ; on the 
contrary, their inclination is to meet labor organiza- 
tions on a common basis and treat with them and 
discuss all propositions from a business standpoint, 
safeguarding the interests of all concerned, with the 
hope of ultimately disposing of the necessity for 
strikes or lockouts. 

Stove Founders' Association. — One of the 
first organizations of employers in this country to 
meet organized labor with the view of enacting 
conciliatory measures to arrive at a peaceful solution 
of all their difficulties was the Stove Founders' 
National Defence Association. This association 
was organized in 1886, or nearly sixteen years ago; 



284 Voluntary Arbitration 

its primary object was to unite the manufacturers 
of stoves for their mutual protection against any- 
unjust demands and unlawful acts of their work- 
men, whether through the influence of labor organ- 
izations or otherwise. It was also the desire and aim 
of its promoters to so conduct its operations as to 
convince the most sceptical that only fairness and 
equity would be countenanced upon any question 
affecting the interests of its members, and that any- 
thing to the contrary would be met with a resistance 
supported by the united efforts of the organization 
which would be most emphatic and convincing. 

For several years following its institution it was 
frequently called upon to exercise its influence, and 
successfully defended its members in trying conclu- 
sions with the Iron Moulders' Union of North 
America, an organization embracing in its member- 
ship a very large proportion of the stove moulders 
of the country. 

The Stove Founders' National Defence Associa- 
tion was at no time opposed to labor organizations 
as such, and as early as 1887, after a strike that in- 
volved almost the entire stove industry, the presi- 
dent of the Stove Founders' National Defence 
Association extended the olive branch to the 
executive officers of the Iron Moulders' Union of 
North America, suggesting that both organizations 
through duly appointed representatives get together 
in conference and endeavor to settle future differ- 
ences upon a basis of fairness and equity, but the 
suggestion was not acted upon until about three 
years later, when a committee was appointed by the 



Thomas J. Hogan 285 

moulders' organization with full power to act, and 
shortly afterward the first conference was arranged 
for. 

Plan of Conferences.— The first conference 
was held in March, 1891. Conferences have been 
held annually since that time, and rules and laws 
have been mutually agreed to that have resulted in 
substantial benefit to both organizations, and there 
has not been a strike or lockout during the inter- 
vening time, although previous to that time strikes 
and lockouts were very frequent. 

The term "arbitration," as generally understood, 
does not appear in their agreements. All questions 
of dispute are first taken up by the parties directly 
interested, and they are urged by the officers of 
their respective organizations to exhaust every effort 
to reach an amicable adjustment, and only upon 
their failure to agree are they to call upon the presi- 
dents or representatives of their respective organiza- 
tions, and these representatives immediately repair 
to the scene of action, where they together take up 
the matter and endeavor to adjust it ; if they fail to 
agree they then summon the board of conciliation or 
mediation, which is composed of three from each 
organization, who must decide it, otherwise "war is 
inevitable." 

During the ten years that this arrangement has 
been in existence the board of mediation has never 
been called upon but once, and their decision was 
against the employer. With this one exception, no 
difficulty has gone beyond the presidents or their 
representatives, and there has been no loss of time 



286 Voluntary Arbitration 

or wages on the part of the workmen pending final 
adjustment. By this arrangement, and under the 
rules of their agreement, the men must remain at 
work and the employer cannot close his works pend- 
ing the adjustment. 

They attribute the success of their arrangement to 
the adoption of the plan of thorough conferences by 
the parties at interest, instead of leaving the dis- 
puted questions to be decided by an umpire or 
referee, who would be almost sure to be biassed in 
either direction, — at least it would be so looked 
upon by the party decided against, whereas, under 
their plan, an agreement being reached by the con- 
sent of both sides, it is accepted without further 
question. 

Through the medium of these conferences both 
parties have learned to know each other better and 
to realize that there are two sides to every ques- 
tion ; and more frequent contact and discussion of 
the different questions have been educational ang! 
developed their ideas to such an extent that they 
are able readily to perceive what is best to promote 
their mutual interests. 



VOLUNTARY ARBITRATION 

Experience of Iron Moulders 
by martin fox 

ALL who have given the subject of strikes and 
labor disputes any consideration must agree 
that they are indications of discontent on the part 
of the workers against the wages or conditions under 
which they are required to labor by the employing 
interests. As industries have expanded and become 
more diversified with the progress of the country 
the friction between the two factors of industry has 
increased. Competition became keener; it became 
necessary to economize at every possible point, in 
order to maintain a position in the market. 

Wages, while labor remained in an unorganized 
condition, was always one of the first points on 
which the economizing policy was applied. It was 
not surprising, therefore, that the individual laborer, 
finding himself thus at the mercy of changing con- 
ditions, should have seen in combination an effective 
force with which to protect himself. In the latter 
half of the last century trade-unions grew rapidly 
in power. Their earlier efforts were conducted on 
the more primitive method of might being right. 
The employer and the employee seemed to regard 

287 



288 Voluntary Arbitration 

each other as natural enemies, and the antagonism, 
of course, extended to the organization of the em- 
ployee, with the result that the efforts of the em- 
ploying interests were often directed toward crushing 
the organizations of labor; and, on the other hand, 
I will frankly admit instances are not lacking where 
organizations of labor have forced arbitrary con- 
ditions upon the employers when the time was 
opportune. 

Such a condition of affairs could not always pre- 
vail. Bitter experience and a more intelligent con- 
ception of the labor problem convinced the more 
broad-minded element of both sides to the contro- 
versy that justice could never be done, nor could 
satisfactory relations ever be established between 
the employer and the employee, by a policy in 
which each was disposed to push his advantage to 
the utmost, without regard to the interests or wel- 
fare of the other. It was realized, too, that while 
the employer's capital was invested in an industry, 
the workman's capital, in the shape of his labor, 
was also invested in it, and that there was a mutual 
interest in its success. 

It is scarcely necessary to point out that strikes 
were extremely unprofitable to both interests in- 
volved, and that, notwithstanding their success or 
non-success, they invariably left behind a bitter 
feeling, which augured ill for the future harmony of 
the working force and the management, which, it 
will be admitted, was not conducive to the best re- 
sults of their co-operation. 

Iron Moulders and Stove Founders.— The 



Martin Fox 289 

Iron Moulders' Union, which I have the honor 
to represent as its president, has had its full ex- 
perience of strikes since its organization in 1859. 
In 1886 a new element was interjected into the in- 
dustrial warfare which it had ceaselessly waged. It 
was in the stove manufacturing branch of the iron 
moulding trade. Learning, no doubt, the lesson 
the workmen had learned — that in combination they 
possessed greater power of offence or defence than 
when tliey acted in their individual capacity — the 
stove manufacturers, who had for some years been 
associated for the purpose of discussing matters of 
genera] interest to the industry, formed what is 
known as the Stove Founders' National Defence 
Association. In the year 1887 that association and 
the Iron Moulders' Union of North America first 
clashed. The struggle was a bitter one, and, while 
at its conclusion neither side could claim a decisive 
victory, it left each with a better appreciation of the 
other's power, and emphasized the disastrous re- 
sults that might be expected to ensue from a series 
of conflicts between such powerful associations. 
The active spirits of both finally met in conference 
in 1 891, and the result was the formation of what I 
believe to be the first agreement in this country 
which provided for the application of the principles 
of voluntary arbitration — or perhaps it might be bet- 
ter named voluntary conciliation in — disputes aris- 
ing between members of an employers' association 
and members of a trade-union. This agreement 
simply recited general principles and provided means 
for their practical application to trade problems 



290 Voluntary Arbitration 

as they were known to exist by the representatives 
of the two associations The wage rate, being the 
most prolific source of friction, was the one most 
carefully provided for. There were other matters, 
affecting shop management and conditions, upon 
which at this time no agreement was possible, and 
it was wisely determined to allow time and the edu- 
cation which must result from annual contact and 
conference to bring its influence to bear before at- 
tempting to secure an understanding upon them. 

While this was the first practical application of 
the principles of arbitration to disputes arising in 
any branch of our trade, I might add that as early 
as 1876 a referendum vote of the membership of the 
Iron Moulders' Union had declared in favor of the 
arbitration of trade disputes, but had not been able 
successfully to put this policy in operation, because 
there was no association of employers with whom 
to enter into such a contract. When a dispute arose 
between a stove manufacturer and his men, and ne- 
gotiations between their immediate representatives 
failed, there was at once an open rupture, and when 
that has occurred it is difficult indeed to arbitrate. 
In the agreement to which I have referred cog- 
nizance was taken of that fact, and one of its 
clauses provided that the members of neither asso- 
ciation should be governed by their impulses, but — 
and I desire to emphasize the point — should remain 
at work pending investigation by the proper officers 
of the two associations. 

General Principles. — From my experience 
with this successful attempt at conciliation and 



Martin Fox 291 

arbitration of industrial differences I am led to 
deduce: 

First — That both the employing and employed 
interests must be organized into associations which 
subscribe to the principle that capital and labor have 
an equal voice in the fixing of wages and conditions 
of labor before the principles of conciliation or volun- 
tary arbitration can be successfully applied. 

Second — The more thorough that organization on 
both sides the better the ultimate results. 

Third— Work should continue without interrup- 
tion pending arbitration. 

Fourth — That, inasmuch as it is only through 
the existence of an organization of the working men 
interested that arbitration can be successfully under- 
taken, employers should encourage their growth 
and extension. 

Fifth — That when the dispute arises over some 
technical detail of a trade upon which there has been 
no general agreement on the part of the associations 
of employers and workmen, a conciliatory policy 
should be pursued by both parties and an effort 
made to settle by common-sense methods, with a due 
regard to the custom and precedent of the locality 
in which the dispute arises. 

Success and Failure. — Our success in apply- 
ing the principles of voluntary arbitration in disputes 
arising in the stove trade inclined us to view with 
some gratification the tendency of the foundrymen 
in other branches of the trade to form an association 
on the same lines as the Stove Founders' National 
Defence Association. And when the National 



292 Voluntary Arbitration 

Founders' Association was finally launched on its 
career, I, as president of the Iron Moulders' Union, 
made advances, with a view to consummating an 
agreement such as we already had in the stove 
trade. These advances were met in a friendly 
spirit, and in March, 1899, representatives of the 
two associations met in New York and ratified the 
agreement since known as the "New York Agree- 
ment." 

This agreement did not go any further than to 
recite the faith of each party in the principle of con- 
ciliation and arbitration, and provide the necessary 
machinery through which to give it practical effect. 
No attempt was made to effect an understanding 
upon matters of technical detail. That was con- 
sidered a wise policy, for, unlike the stove manu- 
facturers' association, which represented only those 
who were engaged in the same industry, the Na- 
tional Founders' Association practically admitted to 
membership any foundryman who was not a member 
of the other association. Thus it had a composite 
membership, representing foundries whose methods 
and necessities were not identical, and it would be 
extremely difficult under these circumstances to 
formulate agreements of a general character capable 
of meeting all exigencies which might arise in the 
shops of a membership 0/ such a varied character. 

For a time the two'associations confined their 
efforts to a consideration of wage disputes, and were 
fairly successful, although one serious weakness was 
early detected, in the disposition of a number of the 
members of the National Founders' Association to 



Martin Fox 293 

- 

refuse recognition to the trade-union of their mould- 
ers. That recognition, as I have previously shown, 
is, next to the fact of an organization of the two in- 
terests, one of the chief requisites to the success of 
the principles we had subscribed to. Later on at- 
tempts were made by representatives of the National 
Founders' Association and the Iron Moulders' 
Union, in conference, to come to an understanding 
upon questions vitally affecting the interests of both 
parties in matters of shop practice and conditions of 
labor, and, in the opinion of the union representa- 
tives, vitally affecting the integrity of their organi- 
zation, but were unsuccessful, and led to the most 
strained relations between the two associations, 
which culminated later in an open rupture in an im- 
portant section of the joint jurisdiction. 

Here, then, we have two examples of attempts at 
voluntary arbitration of trade disputes in the foundry 
industry — one successful, the other partially unsuc- 
cessful. A comparison of the policies pursued in 
each case will assist the student of the industrial 
problem to conceive the dangers which threaten the 
success of ail policies involving arbitration, and will 
show by practical demonstration, more clearly than I 
can do in words, that unless the last remnant of that 
antagonism which existed between the employer 
and the employee in the earlier days of our industrial 
development be removed, and employers and em- 
ployers' associations give organizations of labor 
(which alone can assist them in the successful appli- 
cation of the principles of voluntary arbitration in 
industrial disputes) the fullest recognition and 



294 Voluntary Arbitration 

encouragement, we can never hope to see the fullest 
success of its beneficent principles. It may be 
thought that these sentiments are the sentiments of 
a trade-unionist. They are — and, as such, are the 
sentiments of a class of men who have given the 
subject a longer and more interested consideration 
than any other class of the community. They are 
not entirely selfish in their character, but are the 
deductions of long experience and earnest thought 
in the labor movement. 

Voluntary versus Compulsory Arbitra- 
tion. — Before proceeding to the consideration of 
compulsory arbitration permit me to point out that, 
under a system of conciliation or voluntary arbitra- 
tion such as I have outlined, it is made mandatory 
that the parties immediately interested in any dis- 
pute make an earnest effort to settle, themselves, be- 
fore referring it to outsiders. It is true, the mere 
existence of an agreement which provides for the 
arbitration of disputes in any trade has a tendency 
to lessen the seriousness of the effort made by the 
original disputants to settle, because they know fail- 
ure to agree does not immediately involve them in a 
strike. This is a regrettable feature, but is, after all, 
only primary in its character, and when it is found, 
after a few experiences, that as good terms can be 
secured by their own efforts as can be secured, as a 
rule, by arbitration, only the more serious disputes 
will find their way to the arbitrators, who, under this 
system, are always practical men, thoroughly con- 
versant with the subjects which are likely to be 
brought to their consideration. 



Martin Fox 295 

It might not be amiss at this stage to say that, in 
the event of an industry coming under the control 
of one immense corporation, and each branch or 
plant thereof being simply the part of one great 
whole, it would be an almost impossible proposition 
to operate successfully under such an arrangement 
as that already quoted. It would no longer be pos- 
sible to secure a committee of disinterested em- 
ployers, thoroughly conversant with the industry 
and identified with it, to act on the board of con- 
ciliation or arbitration, and this is one of the strong 
features of the arrangement under discussion. We 
cannot arbitrate in this way with a trust controlling 
the entire industry, although we might with a num- 
ber of smaller combinations controlling the industry 
in different sections of the country. In such an 
emergency, if the principles of arbitration are to 
govern, I incline to the belief that the State or 
national government would have to provide the 
necessary machinery. 

Having dwelt at some length already upon prac- 
tical examples of the operation of a system of 
voluntary arbitration in the iron moulding industry, 
I will be brief in my remarks upon compulsory arbi- 
tration. It will have been gathered from my utter- 
ances that I am a strong adherent of the voluntary 
system. Organized labor never assumes the posi- 
tion "there is nothing to arbitrate," and it requires 
no compulsory law to induce it to submit its case to 
a tribunal competent to adjudicate upon it, when 
its plea involves one of wages or conditions. There 
is something about the idea of compulsion that is 



296 Voluntary Arbitration 

repugnant to American conceptions of liberty of 
action, and it is not difficult to conceive a case in 
which working men would be compelled to work 
under conditions or for wages that were obnoxious 
to them. I recognize, of course, that, were it pos- 
sible always to guarantee a tribunal to adjudicate 
upon a dispute which could and would do full justice 
to all interests, compulsion, both in arbitrating and 
in enforcing the award, could be justified. We 
know, however, that among men as at present con- 
stituted such a guaranty is impossible. / We know, 
also, that there is not a perfect community of under- 
standing among the classes upon what is called the 
labor problem. That being the case, it would be 
an extremely difficult matter to constitute a court 
of arbitration which would have the entire confi- 
dence of the interests involved, and, hence, to 
secure a court whose finding would give satisfaction. 
I am strongly of the conviction that, in a country 
like the United States, where there are so many 
diverse interests, so many diverse views, and so many 
instances in which the interests of capital are placed 
before those of labor, compulsory arbitration is thor- 
oughly impractical, and its principle is thoroughly 
obnoxious to the American citizen. The citizen 
cannot afford to lend his assent to any govern- 
mental institution which, in the capacity of a court 
having power to enforce its award, could compel 
him to submit to conditions of labor which are 
obnoxious to him, under penalty of fine or loss 
of liberty. Especially is it objectionable when in 
a system of voluntary arbitration, such as has been 



Martin Fox 297 

outlined in this paper, there is as yet ample pro- 
vision both for the preservation of industrial peace 
and the dispensation of justice in industrial disputes. 

I would not be consistent, after having assumed 
this attitude to compulsory arbitration in general 
industrial enterprises, were I to indorse its applica- 
tion in disputes of those engaged in enterprises of a 
quasi-public character, such as steam or street rail- 
ways. I am willing to admit that, inasmuch as the 
public are more deeply interested in this instance, 
and are often grievously inconvenienced by reason 
of disputes arising between the employees and the 
management engaged in the operation of enterprises 
of this character, there is more justification for such 
governmental interference as would be involved in 
this limited form of compulsory arbitration ; but I 
feel that, even under these circumstances, I would 
not be justified in prescribing for the employees of 
a street railroad or other public carrier a process to 
which I objected myself. It will be seen that in all 
my references to compulsory arbitration I assume 
that the board or court of arbitration would be 
vested with the power necessary to enforce its award 
— that is, to punish its violation by fine or imprison- 
ment. And I can conceive of no such board or 
court proving effective unless.it be vested with such 
powers. 

Then, again, if the New Zealand law be followed 
the referee or odd man in the board would likely be 
a member of the judiciary, and as he could not al- 
ways be expected to possess an intimate knowledge 
of the varied interests he would be called upon to 



298 Voluntary Arbitration 

decide, these interests would be in some danger of 
suffering injustice, such as would not be the case 
were the voluntary system in operation. 

State Boards. — Of State boards of arbitration 
I will have little to say. We all know that, as at 
present constituted, they have proved far from satis- 
factory as a means of dealing effectively with labor 
disputes. Almost invariably they savor, more or 
less, in their complexion of partisan politics, and do 
not possess the complete confidence of either one or 
the other factor in industry. As a result they are 
very rarely appealed to by the two parties interested 
in a dispute. They have no power either to com- 
pel reference of disputes to them or to enforce their 
award when reference has been made, and can only 
render service in those exceptional instances in which 
the parties mutually agree to refer their differences 
to them for determination, and express their willing- 
ness to accept the finding. 

With these brief references to compulsory arbi- 
tration and State boards I will close, but not before 
I reiterate my firm and unfaltering conviction that 
the peace of the industrial community and the 
broadening of our civilization are dependent upon 
the completest organization of the men and women 
engaged in the industries of our country, the organi- 
zation of the employing interests on lines designed 
to mete out justice and not to disrupt or antagonize 
the organizations of labor, and the assent of both to 
the fullest and freest application of the principles of 
conciliation and arbitration in industrial disputes. 



VOLUNTARY ARBITRATION 

The Obstacle to Arbitration 
by frank p. sargent 

ARBITRATION, as a medium of settling ques- 
tions affecting wages, hours of service, and 
rules governing employment upon which a difference 
of opinion exists as between the employer and wage- 
earner, has always been a welcome influence among 
the railway employees of this country. Long be- 
fore there was any marked interest shown on the 
part of the general public in this important subject- 
the railway employees, through the representatives 
of their organization, were endeavoring to obtain 
arbitration as a means of proving to the public the 
fairness of their position, as well as to offer a peace- 
ful solution of the differences alleged to exist, and 
at the same time avoid those strained relations be- 
tween the employer and the employed which are so 
manifest when extreme measures are resorted to, 
namely a "strike." 

Arbitration entered into in good faith on the part 
of both parties to a controversy must result in a 
peaceful solution of the difficulty, especially if the 
arbitrators selected are disinterested. In such cases 
the evidence of both contestants will be duly 

299 



300 Voluntary Arbitration 

weighed and the award will be impartial; and the 
party to the dispute having justice on its side will 
have no cause for alarm. 

To make arbitration effective, however, it must 
be brought into action at the proper time. In the 
majority of instances in the past, where questions 
in dispute between the employer and the employed 
have been submitted to arbitration, or where it has 
been urged by the general public, it has been when 
both parties to the controversy were far apart; in 
fact, had severed relations with each other. I main- 
tain that if the locomotive firemen in the employ of 
a railway company have grievances regarding wages 
or conditions of employment, and through a com- 
mittee of their own selection they present them to 
the managing officer, and no adjustment can be 
reached, and an appeal is taken to the organization 
with which they are affiliated, and the representa- 
tives of that organization endeavor to bring about 
a settlement of the question in dispute and fail, then 
is the time to seek arbitration. 

If each party to the controversy believes that his 
position is fair, neither should object to the matter 
being presented to a disinterested party or parties 
to determine the merits of the case and to make the 
award. At this time both employer and employee 
are on good terms. There has been no interference 
with the business of the company, neither has the 
employee been interrupted in his labor. A differ- 
ence exists as to what should be the wage or the 
rule of employment. Both parties may be wide 
apart in their opinion, but there is a far different 



Frank P. Sargent 3 QI 

condition of things than there would be if, when 
the representatives of the employer and the repre- 
sentatives of the labor organization of which the 
employees are members, have failed to make terms 
a withdrawal from the service of all the firemen in 
the employ of the company is ordered, in other 
words, to use a plain term to express our meaning, 
a strike is inaugurated. 

Put yourself, if you please, in the position of a 
railway president or manager, or the employer of a 
large number of wage-earners. A difference has 
arisen regarding the wage schedule. Several con- 
ferences have been held between the representatives 
of the company and of the men. In all of these 
meetings an effort has been made by each side to 
sustain its position. There may have been warm 
debates and a wide difference of opinion, but at no 
time has there been any interruption to the business. 
The trains are all running; the wheels are turning, 
and the earning capacity has not been reduced. Is 
it not fair to presume that the employer is in a much 
better frame of mind to consider a medium of peace- 
ful settlement under those conditions, and is not 
then the proper time to advocate arbitration? 

What has been the common practice? In most 
cases where wage disputes have arisen the employer 
and employee come together to discuss questions 
affecting the pay of the employees. The conference 
terminates with no good results, and the final con- 
sequence is a strike. Sometimes it is a "lockout." 
When the employer and employee have separated ; 
when the earning power of both parties has ceased 



302 Voluntary Arbitration 

for a time; when the conditions incident to a strike 
are most prevalent and the tension between the con- 
testing parties is most severe, then comes the effort 
of the press and the pulpit, the statesman and the 
citizen, to bring about arbitration. It is then we 
find the employer taking the position that there is 
nothing to arbitrate; ''these men have left my em- 
ploy of their own free will, and are no longer in my 
service ; therefore there are no questions in dispute 
to be adjusted." The struggle goes on. The em- 
ployer endeavors to get other men to enter his ser- 
vice, and the former employees use every endeavor 
to keep him from succeeding, with the hope of so 
crippling his interests that, finally, he will be com- 
pelled to yield to their demands, and by a settlement 
they can regain their former positions. Meanwhile, 
those least able to stand the drain upon their re- 
sources hear the continual cry coming from the peo- 
ple, "Arbitrate," and the answer, "There is nothing 
to arbitrate." 

How much better it would have been if every in- 
fluence that favors arbitration as a medium for an 
adjustment of wage controversies had been centred 
upon the employer and the employee before they 
severed relations with each other, and when both 
were together and the earning capacity of each not 
interfered with. 

In my humble opinion, arbitration has not been 
sought at the right time; that is to say, in many in- 
stances. I am fully aware that there are employers 
of labor who do not favor arbitration, and who, when 
approached at any time, under the most favorable 



Frank P. Sargent 303 

circumstances, would refuse it. Such persons can 
only be changed by public opinion. 

They maintain that they are capable of conduct- 
ing their own business, and that to submit to others 
matters pertaining to their relations with their em- 
ployees would eventually place them at the mercy 
of their employees, who would continually be mak- 
ing demands with the expectation of always getting 
consideration through a board of arbitration. This 
is a very weak position for any employer of labor to 
assume. 

Wage-workers are not unreasonable when properly 
understood. Neither are those who are selected to 
sit in judgment between the corporations and their 
employees of a character to make unfair decisions 
toward either party. The general public has an in- 
terest in these disputes between labor and capital, 
especially where the public interests are so largely 
involved as in the case of railways and other com- 
mon carriers, and hence the influence of the public 
should be brought to bear most earnestly upon 
those who are to-day opposed to arbitration. It is 
not the wage-earner who opposes it. Arbitration 
is not discouraged by organized labor. The labor 
press of the country is not arrayed against it. 
Therefore, let the people who are so earnestly im- 
pressed with the value of this means as a solution 
of the labor problem direct their energies toward its 
strongest opponent — organized capital. 

The railway organizations have placed themselves 
on record by supporting the National Arbitration 
Bill, now a law, and known as the "Arbitration 



304 Voluntary Arbitration 

Law," which had for its purpose the creation of 
"An Act Concerning Carriers Engaged in Interstate 
Commerce and Their Employees." To-day two 
hundred thousand railway employees stand pledged 
to arbitration, and, in all questions affecting their 
wages or hours of labor, stand ready at any time, 
when unable to reach a satisfactory conclusion with 
their employers, through the medium of committees 
of the employees, to submit any and all questions 
to arbitration. If the same spirit is shown on the 
part of the railway managers and operators, there 
need be no fear of the interruption of interstate 
commerce or the issuing of injunctions by the 
Federal courts on account of strikes. 



PART V 

MODEL INDUSTRIES 



a. Profit and Stock Sharing. 

b. Co-operation. 



305 



MODEL INDUSTRIES 



Tolman. Need of personal touch — Social engineering — Instances 
of mutual love and respect — The Bournville Village Trust — 
Prosperity sharing at Port Sunlight. 

Stead. Next step co-partnership through stock sharing — Experi- 
ence of South Metropolitan Gas Company — Put yourself in his 
place. 

Gilman. Common interest of employers and employed — Labor co- 
partnership not a solution — Prosperity sharing — Profit sharing 
proper — Dividend to labor — Hostility of labor unions — Need 
of incorporation of labor unions — Possibilities of great corpo- 
rations — Taff Vale decision. 

Nelson. Under present wage and social system irrepressible con 
flict between employed and employer — Association, concilia 
tion, arbitration only temporary palliations — Experience in 
profit sharing — Conditions of successful profit sharing — Profit 
sharing a step toward co-operation. 

Pomeroy. Profit sharing unsuccessful — Desirable only when it 
leads to co-operation — Profit sharing and prosperity sharing 
autocratic, not democratic — Great incorporations in industries a 
step away from democracy. 



307 



MODEL INDUSTRIES 

Prosperity Sharing 

BY WILLIAM H. TOLMAN 

FROM the point of vantage of those who are able 
to observe the entire field of social activity and 
note those movements for real betterment, the bal- 
ance must be placed to the credit of progress and 
advance. There is a forward social movement and 
there is no reason for discouragement. If one looks 
for gratitude in return for favors, or even justice, he 
is mistaken; yet that fact does not lessen individual 
responsibility. Noblesse oblige was never truer than 
to-day. 

The business world is usually the first to organize 
and, for the promotion of the greatest efficiency, 
apply commercial common-sense. Accordingly, the 
clearing-house. 

In the growing number and the varying adapta- 
tion of movements for improving the condition of 
the employed, there is also the need of a social 
clearing-house for the prevention of overlapping and 
duplication of social and industrial effort. Such a 
clearing-house already exists in the New York 
League for Social Service. In addition to this, 

309 



3io Model Industries 

there is also the necessity for the interpretation of 
the collected material, so that the individual em- 
ployer may know what he can best adapt to his own 
individual and particular needs. At this point ex- 
pert specialization is demanded, so that the em- 
ployer may know just what he may do first to the 
best advantage and why, because he does not want 
to make any mistakes. 

It appears that a personal touch, a human point 
of contact, has been lacking, and is highly desirable; 
that there was no means of bringing people together, 
so that they might see each other and hear what 
each had to contribute from his own experience. 

Social engineering is one of the newest profes- 
sions, and in the conscious need and the imperative 
necessity for accurate scientific information, which 
may be instantly applied, there will be an increasing 
demand for the services of the social engineer. 

Certain arts have reached a high degree of organi- 
zation. The art of war is now so highly specialized 
that most of the nations are afraid to disturb the 
equilibrium of outward peace; commerce is laying 
under contribution the most highly improved means 
of transportation and communication, whereby she 
is occupying the remotest corners of the globe; 
machinery is so delicate in its mechanism and so 
complicated in its operation that we are no longer 
amazed at the marvels of the inventor and the 
mechanician. 

Improved machinery is creating a demand for 
improved men, and it is the business of the social 
engineer to make improved men to operate the im- 



William H. Tolman 311 

proved machinery. In the making of an improved 
man the first element is a true home, or an oppor- 
tunity for himself, his wife, and his children to en- 
joy pure air, light, and water, the physical essentials 
of a home. Given these conditions, the chances all 
favor a desire on the part of the parents for the 
mental and moral development of the children, 
whereby they may have better opportunities than 
their parents for getting on in the world. 

The modern factory is the industrial home, where 
the wage-earner spends at least one third of each 
working day. The working home must be made 
bright and airy by means of many windows; the 
colors should be restful in tone, especially where 
the work is of such a character as to admit it; the 
hygienic installation of toilet closets and lavatories 
should be ample and modern — that is, the best, 
which is another way of saying the cheapest; order 
and discipline should be kept to a high standard, 
because based on justice and sympathy. This in 
general is what the social engineer must accomplish. 

All these provisions mean the elimination of 
charity, for the self-respecting employee does not 
want it, nor will the self-respecting employer offer 
it. If an employer introduces any form of industrial 
betterment as charity the workers will say, "Why 
not increase our wages to that extent, and we will 
take care of our own charity." And they are right. 
What the employee does want is an opportunity to 
increase his wage-earning capacity, for increased 
capacity is almost always sure to mean increased re- 
sponsibility, hence higher pay. 



3 12 Model Industries 

Personal Relations.— Here are a few inci- 
dents that illustrate and show the progress and 
value of social and industrial betterment in the 
factory, shop, and business. 

Colonel James Kilbourne, president of the Kil- 
bourne & Jacobs Manufacturing Company, of Co- 
lumbus, Ohio, says: 

"We have always endeavored to treat our employees 
as men, with the same feelings, hopes, and rights as our- 
selves, and to consider that we are all of us one great 
family with mutual interests. I have not begun to do as 
much for our employees as they have done for me, but 
have endeavored to treat them always as I should like to 
be treated if our positions were reversed. Our relations 
for nearly thirty years have been always friendly and sat- 
isfactory; we have never had any strikes or troubles of 
any kind, but this is owing as much, if not more, to the 
character of our employees. As illustrative of this, I 
will tell you of an incident which occurred during the 
panic of '93. 

"A month or so after the panic began, and when large 
concerns were failing in every direction, there filed into 
my office one morning some fifteen or twenty men, rep- 
resenting the several shops in our plant. Their manner 
and looks were serious, and while I had no more earnest 
wish than that I should never have any trouble with our 
employees, I feared that it had come at last. 

"Finally one of them, as spokesman, said that they had 
thought very long over the matter that had brought them 
there before they had decided to come, and that they 
hoped they would find me prepared to accede to their 
request; that they had noticed that large concerns who 
had stood the stress of many panics were failing every 



William H. Tolman 3 J 3 

day; that our warehouses were filling with goods which 
we could n't sell, and that they presumed we, like others, 
were unable to obtain payment for goods already sold, 
and that they feared that we might be in danger as well 
as other concerns; that some of them had been with us 
for a few years, some for many years, and some the 
length of a generation; that they had always received 
fair wages and had been able to save some money, and 
while the individual savings were not large, the aggregate 
was a considerable sum, and that they had come to tell 
me the whole of it was at my disposal for the use of the 
company if it were needed. 

"I will leave you to imagine what my feelings were, 
for I have never, from that date to this, been able to find 
words in which suitably to express them. 

"This is only one of the many instances of their con- 
sideration, and, therefore, if you are seeking to say any- 
thing about us confine what you have to say to the loyalty 
and good character of our employees rather than anything 
about ourselves." 

A prominent business man, president of a coal 
and iron company at Birmingham, Ala., Mr. Gil- 
raeth, writes: 

"It has occurred to me to state also that I have an idea 
that good wages will not always and at all times satisfy 
men. My judgment is that love is the only thing that 
will control them at all times and under all circumstances; 
and unless a man can love his operatives, and have them 
love him, he cannot control them under all the trying or- 
deals through which both sides will have to go during the 
life of a business. In my judgment, there comes a time 
, in the affairs of our operatives in which they will not be 



3 H Model Industries 

satisfied with money alone. In other words, I think oc- 
casionally a crisis arises in their affairs, or they get in 
such a shape or frame of mind that nothing will satisfy 
them but to feel that they are loved by their employer. 

"If an operator can really love those who are under his 
control, and not look on them as servants, but as friends, 
and can make them feel that his liberality is not exercised 
as a gift to be especially grateful for, but that it is his 
pleasure to divide the earnings with them in an equitable 
manner, and can assure them of his love and sympathy 
— then, and in that event, he can control them when a 
serious crisis comes. But I do not think any operator 
can ever exercise a successful headship over his em- 
ployees unless he himself first acknowledges the headship 
of God. In other words, he must know of himself that he 
is human after all, as well as his employees, and that God 
is maker and ruler of us all. A man of this kind will not 
overstep his authority, and will generally find ways to 
comfort and control his men at times when they are 
seriously disturbed and in doubt." 

The Bournville Village Trust. — The vil- 
lage community built up by Mr. Richard Cad- 
bury and Mr. George Cadbury, at Bournville, 
near Birmingham, England, consists of four hun- 
dred acres, and contains many cottages for the em- 
ployees, now numbering nearly two thousand. The 
lowest rental of these cottages is $1.50 a week, for 
which the tenant gets three bedrooms, a kitchen, 
a parlor, and a third room downstairs, and a bath. 
The houses are in the best sanitary condition, and 
a large garden goes with each house. The village 
is laid out very attractively with its winding streets, 



William H. Tolman 3 J 5 

its trees, and its open spaces. There is a large 
recreation ground, swimming pools, a dining-room 
for the girls, a boys' club, light and well-ventilated 
workrooms. 

A block of beautiful cottages forming a quad- 
rangle, beautifully kept up with turf and flowers, 
has been set aside for homes of the old or semi- 
dependent. They are called " Houses of Rest." 
Each home consists of three rooms and may be 
occupied by any old lady who can pa/, either herself 
or through relatives, five pence a week. There is 
also a convalescent home. Every summer thou- 
sands of children from the tenements of Birming- 
ham are turned loose on the farms and meadows for 
a day's fresh air and pure food. The slum workers 
of the Salvation Army in London also, who are 
worn out with their labors, are entertained during 
the summer in one of the houses set aside for their 
use. 

In this factory are nearly two thousand girls and 
women, who may buy at cost a warm midday meal 
well cooked. A man is employed to buy the best 
fruit in the market at wholesale to get the best 
prices. The fruit is then sold to the employees at 
cost. A simple form of entertainment is an open- 
air swimming pool for men, large enough for a good 
swim. 

So far all this is interesting as an unusually ex- 
cellent example of good social life for a working 
community. But the significance of it is that it has 
led to and is a part of a unique plan for social better- 
ment — a great social trust, which is a new institution 



316 Model Industries 

and a new kind of benefaction, planned and man- 
aged in a most business-like way, for Mr. Cadbury 
founded last year what he called the " Bourn ville 
Village Trust." In explaining to me the organiza- 
tion, he said: "At present it is in my hands and 
the hands of my family, but after my death the 
trustees may elect a part of their own successors, 
and three trustees shall be appointed, one by the 
Society of Friends, one by the City Council of Bir- 
mingham, and one by the District Council of Kings, 
Norton, and Northfield. Women are not disquali- 
fied, but no more than three may be members at 
any one time." 

Mr. Cadbury has given to the trust 330 acres, on 
which 370 cottages are already built. One hundred 
and forty-three of these have been sold at cost on 
leases of 999 years, and the remaining 227 are rented 
by the week, the rentals being paid into the trust. 
The total rent roll is $26,230 a year, and a fair 
valuation of the gift is $900,000. 

"For some time I had the intention of making 
this trust, and I consulted with those whose judg- 
ment I valued most, in order that the scope of the 
movement might be as far-reaching as possible. 
John Burns was one of my valued advisers," said 
Mr. Cadbury. 

"Will the powers of your gift be confined to Bir- 
mingham? " was asked. 

"No," he said, "the revenue of the trust may be 
applied toward the erection or remodelling of build- 
ings and the acquisition of land in any part of Great 
Britain, and we can arrange with any kind of a 



William H. Tolman 317 

transportation company for cheap transit. I strongly 
desire that the dwellings shall occupy one quarter 
of the site, the rest to be used for gardens and open 
spaces, and I want the rent to be so low as to attract 
the laborers from the slums, but not in any way to 
place the tenants as recipients of charity." 

Any part of the trust may be used for a factory, 
but the suggestion is made that not more than one 
fifteenth of the total area shall be so built upon. 
Lodging-houses may be built, and whatever con- 
cerns the improvement of the families, like lighting, 
transit, and water, may be supplied. 

"Subscriptions may be made to hospitals, provid- 
ing the amount does not exceed one per cent, of the 
annual net rental. Money may be borrowed on 
the security of the trust and land may be given for 
houses of worship, hospitals, schools, technical 
schools, institutes, museums, gymnasia, baths, laun- 
dries, clubs, and recreation. Lecture courses may 
be supported for any educational purpose that tends, 
in the opinion of the trustees, to 'the health, men- 
tal, moral, and physical welfare of the tenants and 
their families.' Provision is made for any kind of 
co-operation with public and private bodies. 

"I have made the trust wholly unsectarian and 
non-political. There shall always be a rigid exclu- 
sion of all influences calculated or tending to impart 
a character sectarian, as regards religion or belief, 
or exclusive, as regards politics, and it will be a vio- 
lation of my intention if participation in its benefits 
shall be based on grounds of religious belief or po- 
litical bias," 



3*8 Model Industries 

I was surprised to find the liberal views enter- 
tained toward the liquor traffic, knowing Mr. Cad- 
bury's own convictions on this subject and his 
constant efforts toward the reclamation of men who 
are the victims of its abuse. 

"At first I determined to suppress saloons alto- 
gether, but the impossibility of that was proved to 
me and I then decided upon certain restrictions. 
None of the buildings shall be used for the manufac- 
ture, sale, or co-operative distribution of any intoxi- 
cating liquors, except by unanimous consent of the 
trustees. If we decide to grant any privileges, we 
may impose any conditions we see fit, with this 
distinct proviso, that any net profits shall be spent 
on the enlargement of the recreative features of the 
village and other counter attractions to the usual 
conduct of the liquor trade. I hope that the trus- 
tees will ever be mindful of my wish that the liquor 
traffic shall be absolutely suppressed, unless such 
suppression lead to greater evils. 

"In trying to help men who were at work all day, 
I very quickly discovered that when night came the 
only thing offered them was the saloon, as you call 
it, our public house, or 'pub.' In some way I must 
get these men back to the land, and that is why I 
locate six of my cottages on an acre, planting fruit 
trees at the bottom of each garden. We all know 
the increased yield of land cultivated on the in- 
tensive plan. I am sure that the employee when 
at work on the land is away from the public house." 

"Can others than your own people live in your 
village? " I asked, 



William H. Tolman 3 J 9 

"Why, certainly; there are many men working 
in Birmingham who cycle home to the pure fresh 
air of their home in the country, eat the fresh vege- 
tables cultivated by their wives and children, some- 
times doing a bit of the garden work themselves. 
Under such conditions the saloon loses much of its 
attractiveness. 

"Let us suppose the time has come when the 
trust has enough of a credit balance to acquire say 
an estate of three hundred acres. As I told you, I 
would set aside one fifteenth for factory purposes, 
locating say twenty in the centre of the tract; one 
tenth of the rest of the land should be set aside for 
open spaces, and the rest to cottages, six to the 
acre. Then, as now, the workman would be near 
his work, but what a difference — the city slum has 
made way for the Elysian field of the country, the 
saloon has given place to the attractions of the 
home. The strength of England lies in her laborers, 
but if they work all day and spend their nights in 
the public houses, the result will be pretty poor." 

The establishment of this trust is of vital import- 
ance, not only to the wage-earners in and about the 
Cadbury works, but to the entire country, for land 
may be bought and buildings erected in any part of 
Great Britain. As an experiment in housing alone 
it will be watched with keen interest, for if Mr. 
Cadbury alone can do all this it will be possible for 
public bodies like town and city councils to do like- 
wise, and the solution of the problem of improved 
housing will have made a decided advance. 
. Port Sunlight.— In 1885 William H. Lever 



32o Model Industries 

was a grocer in Bolton, England. Becoming con- 
vinced that there was a large market for pure and 
cheap soap, he opened a factory in Birkenhead, near 
Liverpool. After three years, he awoke one morn- 
ing to find that his profits for that year were £50,- 
000. Ashe has tersely stated it: "I felt I had not 
earned the money. I did not expect a like result, 
and felt I had no right to it. I sat down and con- 
sidered to whom the money belonged, and found it 
a difficult matter to decide. I reached this con- 
clusion — that, whatever I did, I must share my 
prosperity with those who had helped me make it." 
His solution of the problem was the provision of 
decent homes for his employees. The problem of 
prosperity sharing was worked out at Port Sun- 
light, a village to-day consisting of six hundred 
houses, reading rooms, bowling alleys, swimming 
pools, schools, entertainment halls, summer open- 
air theatres, and recreation grounds. The village 
now represents an expenditure of £400,000. 

One form of prosperity sharing was a rental so 
arranged as to cover taxes, repairs, and maintenance. 
Houses, with parlor, kitchen, scullery, pantry, four 
bedrooms, and a bath, rent for seventy-two cents a 
week. 

At the outset Mr. Lever encountered the usual 
degree of suspicion, distrust, and lack of apprecia- 
tion, but he had made up his mind that what he 
was doing was right — nothing could turn him from 
his purpose. The very men who made trouble at 
first now frankly admit their mistake and are doing 
all they can to help on the communal welfare. 



William H. Tolman 3 21 

When asked for his philosophy, Mr. Lever has 
said: "What I have done has been accepted by my 
people, not on the basis of charity, benevolence, or 
philanthropy. I have never posed as a philanthro- 
pist, but have tried to do what I think is right, and 
in the best way. If the employees view it in the 
same light there will be no misunderstanding, and I 
would like to record my appreciation of the way in 
which they have lived up to their agreement." 

Industrial Betterment. — European civiliza- 
tion, the product of many centuries, has been in 
advance of us in recognizing the need for industrial 
betterment institutions. Many of the promoters of 
these movements have been men of scholarly attain- 
ments, culture, and refinement. They worked at 
these solutions because it was a pleasure. Then, 
too, there was the altruistic spirit, a genuine desire 
to make the world a better place to live in. 

On the other hand, in our country only a genera- 
tion ago civil strife paralyzed the industries of the 
nation. When peace was declared every man of 
affairs devoted his whole energy to the building up 
of his own affairs. Even then he had a hard time 
to get along. Most of our business men rose from 
the ranks and won success by their untiring energy 
and push. Many of them did not have even a com- 
mon-school education. Our population is so cos- 
mopolitan that any feeling of fraternity is slight. 
The assimilation of these foreigners is very slow. 
In our great commercial centres are thousands who 
not only do not speak our language, but do not 
think in terms of American ways and customs. 



322 Model Industries 

To-day the situation is changed. Our nation is 
prosperous. We have great captains of industry 
who have amassed greater wealth than has ever been 
heard of in the old country. Capital and labor have 
become two mighty forces. What is now needed is 
a recognition of the identity of their interests, and 
the next step toward its realization is to make use 
of the experience of the older countries in their 
practical forms of industrial betterment, adapting 
them to local conditions. It is easier to form than 
to reform. 



MODEL INDUSTRIES 

Profit Sharing Plus Co-partnership 
by william t. stead 

1 THINK it will probably be more useful if, instead 
of following closely the various subdivisions sug- 
gested by your special questions, I were to endeavor 
to state as briefly and clearly as possible the conclu- 
sions at which I have arrived on the broad question 
under discussion. That question I take to be — How 
can the relations between labor and capital be im- 
proved? 

To answer this question the most practical method 
is not to elaborate Utopian theories as to what might 
be, but rather to ask ourselves where, in actual 
reality, the relations between capital and labor have 
been so far improved as to approximate to a higher 
standard of perfection than that which generally 
prevails among us. In other words, what is the 
best solution at which mankind has arrived in its 
practical handling of this question? 

Having ascertained that, our next duty is to con- 
sider how we can best bring up the great mass of 
the human race to the position already occupied by 
the pioneers who march in the van. 

Every one will admit in the abstract that the 
323 



324 Model Industries 

great object that all must have in view is to make 
visible as a palpable reality that identity of interest 
which really unites labor and capital, although it is 
so often obscured by the temporary interest. How 
can the two factors in the production of wealth be 
enabled to see the community of their interests? 
That is the problem, for all our industrial warfare 
arises from the fact that the interests, instead of ap- 
pearing identical, are diverse. 

It may be admitted freely that, under existing re- 
lations, these interests not only seem to be diverse, 
but are in reality very frequently opposed to each 
other. Hence the first step toward bringing into 
clear relief the identity of interests is to make the 
interests identical. Many methods have been pro- 
posed for securing this end. I will content myself 
with indicating one, and that the adoption of means 
for the purpose of facilitating the acquisition by the 
workers of a solid share in the stock of the firm in 
whose service they are employed. 

If all the stock in any company was held ex- 
clusively by the operatives employed in the works, 
the identity of interest between labor and capital 
would be so palpable that no perversity of wrong- 
headedness could obscure the fact. Labor and 
capital would indeed be not two but one. However 
desirable such a consummation may be, it must be 
dismissed from our consideration for the moment, 
if only because hitherto it must be placed in the 
category of unrealized ideals. But there have been 
many approximations, tentative and timid, toward 
this ideal state of things. 



William T. Stead 3 2 5 

It has never been found possible to place all the 
stock in the hands of the workers, but it has been 
found possible to facilitate the acquisition by the 
laborer of at least that minimum of stock which will 
make him conscious of solidarity in his interest and 
that of his employer. It is the growing opinion of 
many of the most thoughtful students of social eco- 
nomics in England, that the safest, simplest, and 
directest road out of the present quagmire is by the 
adoption by employers of a system of profit sharing 
of workmen for the purpose of enabling those 
employed to be holders of stock in the concern 
in which they work. It is not asserted that it 
is always possible. All that is contended is that, 
when it is possible, it works well, and justifies its 
adoption by the employers, not on the grounds 
of philanthropy, but on those of the most cynical 
self-interest. 

The classic case in point is that of the London 
South Metropolitan Gas Company. The system 
here in force secures that every year every workman 
employed is entitled to share in the profits of the 
concern, but he is not entitled to withdraw all his 
profits, experience having proved that in many cases 
the money was worse than wasted. But the share 
of profits accruing to workmen is invested by them 
in the interest-bearing stock of the company. 

The system by which this is arranged may appear 
paradoxical, but it is very practical. According to 
the English law, the gas company is not allowed to 
increase its dividend unless it can at the same time 
reduce the price of gas to the consumer. Roughly 



3 2 6 Model Industries 

speaking, the dividend goes up as the price of gas 
goes down, or rather, the price of gas is reduced as 
a condition precedent to an increase of dividends. 
The progressive reduction of the price of gas is 
therefore the statutory gauge of the increased earn- 
ing capacity of the company, for the shareholders 
are not allowed to benefit until the consumers have 
first had their share. The reduction in the price of 
gas to consumers, therefore, affords a practical test 
of the increase of the company's profits, and the 
distribution of profits among the workmen is based 
upon this principle. 

In the South Metropolitan Gas Company, when 
the price of gas falls two cents per thousand feet, 
every workman is entitled to one per cent, upon his 
annual earnings. If it falls four cents, the percent- 
age on his annual wage goes up to two per cent., 
and so on. Hence every workman has a direct in- 
terest in improving the earning capacity of the com- 
pany. It leads them to discourage waste and to 
check dawdling and generally to increase the effi- 
ciency of their labor. 

This system was introduced under the most dis- 
couraging circumstances conceivable. The workmen 
employed in gas works are by no means the most 
intelligent of artisans. They are, indeed, for the 
most part, the roughest of unskilled laborers. The 
introduction of the system was violently resisted by 
the trade-unions, and its inauguration coincided 
with a prolonged strike in which intense bitterness 
of feeling was engendered on both sides. Never- 
theless, Mr. Livesey persisted, and profit sharing 



William T. Stead 3 2 7 

plus co-partnership was established, and has been 
acted upon ever since. 

During these twelve years the result has been 
marvellous. There have been no disputes between 
employers and employed. The workmen have 
shared to the full in the increased weekly wages 
which were gained by other workmen in other gas 
works, while they have received year by year profits 
which in the aggregate amount to £150,000. 

As to the economic effects of the system, Mr. 
Livesey declares that he has been in the company's 
service for over fifty years, but he bears testimony 
that never during the whole of that time have the 
relations of employers and employed been on such 
a footing of mutual confidence and good-will as 
during the last ten years. The friendliest relations 
have been established between both sides, and the 
work has gone on without a hitch. What is much 
more important from the economic point of view, 
the result of this establishment of a common interest 
has been that the gain of the company from the in- 
creased efficiency of the workmen has more than 
compensated for the money paid away in bonuses. 

The English are slow to adopt improvements, 
even when their success has been demonstrated in- 
controvertibly. The Livesey experiment still labors 
to a certain extent under the prejudice excited by 
the angry passions evoked in the strike which pre- 
ceded its adoption, but there is abundant evidence 
that profit sharing plus co-partnership is recognized 
more and more by the longest-headed, most wide- 
awake employers in Great Britain as the key to the 



328 Model Industries 

solution of the question which you have invited us 
to discuss. I do not put it forward as a universal 
panacea. I shall be well content if this statement 
of the good results which have followed the adoption 
of this simple and practical system should lead to its 
adoption by any employers of labor on your side of 
the Atlantic. I do not regard it as final. The ulti- 
mate solution, toward which profit sharing and co- 
partnership are but a half-way house, is that system 
of co-operative production of which we have promis- 
ing beginnings in many parts of the world. Never 
was there a truer maxim than the hackneyed saying 
that the better is the enemy of the good ; but too 
often, while awaiting some ideal good, we neglect a 
practical first step which would bring it appreciably 
nearer to our grasp. 

On the general question of the amelioration of 
the social conditions I only wish to say one word. 
There are two principles which, if acted on practi- 
cally on a small scale, would do more to promote a 
happier state of things than any other that could be 
named. One is that we should endeavor to do unto 
others as we would have others to do unto us, and 
the second, without which the first is not of very 
much value, is that we should put ourselves in the 
other man's place. 

If we could imagine some dictator, backed by the 
whole moral sentiment of the community, strong 
enough to pass and enforce a law compelling every 
employer of labor once every quarter to share with 
his wife and family the home, the fare, and the en- 
vironment of the worst-paid workman on his staff, 



William T. Stead 3 2 9 

more would be done to educate public opinion on 
this question than by-any other measure that could 
be conceived. 

If only every three months or even every six 
months every shareholder, before drawing his divi- 
dend, was compelled to qualify by proving that he 
and his family had exchanged places for twenty- 
four hours with one of their workmen employed by 
the firm, we should see a great and marvellous 
growth of a humane sentiment on the part of the 
well-to-do classes. 



MODEL INDUSTRIES 
A Dividend on Wages 

BY NICHOLAS PAINE GILMAN 

IN the conduct of the symposium on the above 
subject I understand that two general points 
are to be discussed. First, "Are the interests of 
employers and employed mutual?" Second, sup- 
posing that this first question is answered in the 
affirmative, "How can this mutuality of interest be 
made effective? " 1 

! I may be allowed to object to the words "mutual" and 
"mutuality," while accepting all that they are intended to mean 
here. " Mutual " means, properly, reciprocal or interchanged. 

Scott and Dickens, especially the latter, are chiefly responsible for 
the prevalent misuse of " mutual " instead of " common." A writer 
quoted in the Century Dictionary, s. v., puts the matter neatly when 
he says : " Love between husband and wife may be all on one side, 
then it is not mutual. It may be felt on both sides, then it is 
mutual. They are mutual friends, and something better ; but if a 
third person step in, though loyal regard may make him a friend of 
both, no power in language can make him their mutual friend." 

So the employer and the man who works for him may feel a 
mutual regard or a mutual dislike for each other, but " no power in 
language " can make their interests mutual any more than it could 
make them red or Caucasian. Common is the proper word for the 
thing intended. To insist on this point is not pedantry ; it helps in 

330 



Nicholas Paine Oilman 33 l 

Making the verbal change suggested (common for 
mutual), we ask, then, first, are there interests com- 
mon to the working man and his employer? Very 
evidently there are. It is the common interest of 
both that industry should go on steadily, whether 
it be the making of pig iron or steel billets, the 
manufacture of boots and shoes, or of any one of 
the innumerable articles of necessity, comfort, or 
luxury that modern man consumes. 

There can be no productive industry (beyond the 
single man working for himself) started or continued 
without an employer, and nothing can be produced 
without one or more men employed, no matter how 
largely machinery may be used. There is, beyond 
any need of proof, a common interest for both these 
parties that production shall be maintained, and, 
almost as obviously, that it shall be kept up with 
the greatest possible regularity and the largest re- 
sult in the utmost possible or desirable product. 
Here is the plain advantage for both parties. It is 
when the question arises of fixing the shares of this 
product that trouble begins. So far as production 
is concerned it is good for the workman and for the 

its place to render discussion of labor questions satisfactory, just as 
the rejection of those other too common words, " conflict of capital 
and labor," as misleading, does ; this phrase should be changed to 
"conflict of employer and employed." In this last particular the 
subject of this symposium is well stated. 

Editor's Note. — While not a few of the writers in this book have 
interpreted the word "mutual" in this question as meaning " com- 
mon," the editor intended it in its literal meaning, as illustrated, for 
instance, in Dr. Strong's article by the figure of the interrelations 
. of the members of the body. 



33 2 Model Industries 

employer alike that the product be the largest in 
amount, and the price obtained for it the highest 
possible. It is the distribution that makes the diffi- 
culty, men's notions of their own merit and of fair- 
ness of reward differing so greatly. 

There are two other parties to the case — the land- 
lord and the capitalist proper; but, as Walker so 
well showed in his illustration of the web of cloth, 
millions of yards in length, the claims of these two 
parties are usually satisfied with tolerable ease. The 
employer proper, the entrepreneur, and the man em- 
ployed by him — these are the persons who really 
have the dispute of most concern in the industrial 
world. 

Just as in the world of trade, however, it is for 
the advantage of all concerned that trade shall go 
on, and go on freely, no matter what conflicts there 
may be between buyer and seller, so in production 
it is for the interest of both parties that manu- 
facturing shall be incessant and prosperous. 

Here is the common (we must not, in strict use 
of language, say "identical " or "mutual ") interest 
of all persons engaged in production ; the more there 
is produced, the more there will be to divide. 

Just as there is too much trade in which the buyer 
or the seller loses and the other party gains, so there 
is too much production in which the employer or the 
employed gets more than he should. But neither 
trade nor production can continue indefinitely under 
grossly unfair conditions of this kind, for the reason 
of trade is common advantage, one person wanting 
to buy and the other person wanting to sell the 



Nicholas Paine Gilman 333 

same thing; one person, in the second instance, 
wishing to hire work, and the other person wishing 
to sell work. A modus vivendi, some sort of com- 
promise between the workman and the employer, 
will be reached in most cases. 

CO-OPERATION. — Let us suppose, however, that 
a body of workmen who have been employed in 
an iron foundry believe that they can reach the 
ideal solution of their troubles about wages by be- 
coming their own employers — in other words, by 
entering upon co-operative production and dispen- 
sing with the usual employer. Far be it from me 
to discourage in any degree the zeal of co-operative 
producers, or to underrate what has actually been 
achieved by them in Great Britain or in France. 
The system has done much better in the last ten 
years in England and Scotland than ever before in 
the same length of time. 

To take the first of these two countries: Labour 
Copartnership, the organ of the genuine co-operative 
production which divides the profits of business 
among the workers, reports in its issue for August, 
1901, that, at the close of the year 1900, there were 
96 such societies in existence, making sales for the 
year of ,£1,019,082, with a capital of ,£590,628, 
profits for 1900 of £49,227, losses of £3,223, and 
paying dividends on wages of £"8,682. Such a re- 
port is an encouraging sign of a possible co-operative 
regime in the distant future. But how small is the 
whole amount of business done by the side of the 
total product of the country — a drop in the bucket, 
indeed. And the way of co-operative production 



334 Model Industries 

becomes harder rather than easier, in one very im- 
portant respect, as time goes by, i. e., in the average 
amount of capital required to run an establishment. 
In 1880, in the United States, for example, accord- 
ing to the Bureau of Labor, the average capital of 
a woollen mill was $48,289; in 1890, $99,916, the 
number of mills having decreased about one third ; 
so, also, in this decade, the average capital required 
for paper mills and boot and shoe factories more than 
doubled ; that for leather factories and breweries 
more than quadrupled, and that for agricultural im- 
plements quintupled ! Such financial difficulties, and 
moral difficulties almost as severe in their demand, 
seem to render co-operative production an improb- 
able remedy, for a long time, at least, for the great 
mass of working men ; they must, therefore, give 
up, as a body, the notion of dispensing with the 
employer, and must continue their present relations 
under the wages system. 

Prosperity Sharing.— If, then, as much ex- 
perience seems to show, the wages system is to 
be modified, not to be superseded, in what direc- 
tion shall we look for the modification? It seems 
to me a most natural reply to say that a divi- 
sion, in one way or another, among the workmen 
of a part of the profits realized by the employer 
is one desirable method of satisfying the work- 
men's demands. Profit sharing may be called "a 
dividend to labor" (see who will my volume with 
this title), and it may be indirect or direct. If in- 
direct, the bonus may take the form of what is now 
quite generally entitled "industrial betterment." 



Nicholas Paine Gilman 335 

In this case the employer — whether an individual, 
a firm, or a corporation — will make no contract with 
the body of workers to give them an annual bonus; 
but, moved by a lively desire to better the condi- 
tions of their life, he will assist them to provide 
good homes for themselves on easy terms; will 
maintain, or help to maintain, sick funds, accident 
funds, and old age funds (or pensions); he will 
bring into being free libraries, parks, club-houses or 
casinos, technical schools, churches, model villages 
— and many other agencies for assuring the future 
and enriching the present of the manual worker. 1 

Germany, France, England, and America present 
shining examples of deep and humane interest of 
employers in their work-people, taking concrete 
form in these helps to the better physical, intel- 
lectual, and moral life. They have realized what 
Labor Commissioner Wright calls ''the sacred trust 
given into the hands of the captains of industry." 
Such men as Robert Owen (who first showed this 
excellent way to modern manufacturers at New 
Lanark, in Scotland) ; the Peters of Neviges, Ger- 
many; the proprietors of the coal mines at Blanzy, 
in France, and of the glass works at Baccarat; the 
Van Markens, at Delft, Holland; the Meniers, at 
Noisiel, France, the Van Houtens, at Weesp, 
Holland, Ph. Suchard, at Geneva, Switzerland, 
and the Cadburys, at Bournville, England — these 

1 See for details of what has been done by liberal American em- 
ployers Mr. E. L. Shuey's excellent little book on Factory People 
and their Employers, illustrated ; my own volume, A Dividend to 
Labor ; and Industrial Betterment, by W. H. Tolman, Ph.D. 



33 6 Model Industries 

four in great chocolate works ; the Cheneys, of 
South Manchester, Conn. ; the Drapers, of Hope- 
dale, Mass. ; the Warners, of Bridgeport, Conn. ; 
the Sherwin-Williams Co., of Cleveland, O., and 
the Pattersons, of Dayton, O., have proved that 
"it pays" for the employer to give a share of his 
profits to his force in the shops of these various in- 
stitutions. 1 It pays because the friendliness of the 
employers, shown in these many concrete ways, has 
excited, as is most natural, the regard and the 
friendliness of the workers, whose interest, thus 
aroused, makes them virtual partners in the in- 
dustry. These establishments, which may now be 
counted by the dozen, if not by the hundred, in 
Europe and America, practise what some one has 
called "prosperity sharing." It is brought home 
to the employed in the most palpable manner that 
the employer has a humane interest in their welfare 
and wishes them to enjoy the same great elements 
of a healthy and happy life as he does, if not in 
the same exceptional degree — a pleasant, sanitary 
home, education for their children, books and lec- 
tures and parks and museums for the whole family; 
insurance against accident and sickness and old age 
— those chief enemies of the worker; and savings 
accounts to provide comforts or occasional luxuries 
for the sick and the infirm. Such an "indirect 



1 The recent deplorable strike in the National Cash Register 
Works, brought about for entirely insufficient reasons by newly 
formed trade-unions, and ending in their entire surrender, has not 
led to any cessation of the welfare-institutions (as the Germans call 
them) of this model factory. 



Nicholas Paine Gilman 337 

dividend to labor," I, for one, do not esteem the 
less highly because the money is used to provide 
and support institutions for the common weal of a 
body of workers, and is not divided in small sums 
among individuals. 

It is probable that we shall see, especially in 
America, a large development in this generation of 
"industrial betterment " of this kind as great com- 
binations of employers increase in number and in 
size. 

The United States Steel Corporation, to take the 
greatest "trust" as an example, already embraces a 
number of minor corporations like the Illinois Steel 
Works at Joliet and the Carnegie works at Braddock 
and Homestead, Pa., which maintain admirable 
club-houses for their employees. 1 

If it should make a wise use of its recent victory 
over the Amalgamated Association it will develop 
institutions of industrial betterment throughout its 
enormous "sphere of influence," and thus furnish 
all its workers with the same good solid reasons for 
loyalty that the Carnegie Company's men have had 
this last summer. Its great captains of industry, 
with Mr. Schwab at their head, can find no more 
edifying and instructive reading than the accounts 
in books and magazines of what has been done in 

1 It should be borne in mind that the steadfastness of the Car- 
negie Company's men in the strike of igoi probably was due in no 
small degree to Mr. Carnegie's generous provision for them in the 
saving fund system (which pays the workman six per cent, on his de- 
posits), the libraries and club-houses, and his recent great donations 
for general relief. At Vandegrift also there have been similar solid 
reasons for the continuance of industrial peace. 



33% Model Industries 

their own line by the Krupps at Essen, the Bochum 
Steel Company, near Essen, the Marienhiitte Iron 
Works, near Kotzenau ; by Schneider & Co. at Le 
Creusot, the Gouin Construction Company of Paris, 
the Iron Works of Champagne, MM. les Fils de 
Peugeot Freres at Valentigny, and the Comite des 
Forges de France (an organization like the United 
States Iron and Steel Association, including all the 
principal manufacturers); by the Tangyes at the 
Cornwall Works, near Birmingham, and the Elswick 
Works at Newcastle-on-Tyne. These are all iron 
or steel founders, most of them on a great scale, the 
Krupps employing more than 40,000 men in 1898 in 
all their works, and the Elswick Works 1 5,000/ 
The methods they have devised for attaching their 
employees to the company in a community of inter- 
est have stood the test of long trial and have justi- 
fied themselves by the solid advantages which both 
parties have drawn from them. I am in the habit 
of asserting that the formation of trusts is not a bad 
omen for the future of the working man, since I be- 
lieve that they inevitably bring to the front a higher 
order of managing ability than the small corpora- 
tions do, and that these men of pre-eminent busi- 
ness talent will be more likely to grasp the substantial 
financial reasons for the policy of "industrial better- 
ment" ; their selfishness will be farther-sighted than 
that of smaller men. We may hope that the United 
States Steel Corporation will be a shining proof of 

1 Mr. Richard Tangye's brief but extremely readable autobiog- 
raphy, entitled One and All, has a personal interest in this literature 
of peculiar value. 



Nicholas Paine Oilman 339 

this position, especially since it is the great iron and 
steel companies of recent times that have done some 
of the best things in this line in our country and 
abroad. 

Profit Sharing. — So much for ''the indirect 
dividend to labor " ; we come now to the more pro- 
nounced system of profit sharing proper, in which the 
employer promises a direct dividend to labor in the 
shape of a bonus upon wages. To give an instance 
of the utmost simplicity, in which the idea is carried 
out in a very logical manner: Procter & Gamble, of 
Cincinnati, after trying another form of profit sharing 
successfully for several years, became a company in 
1890. The prospectus of the new company promised 
twelve per cent, on the common stock, if earned, and 
pledged the directors to pay the workmen the same 
dividend on their wages as that earned by the 
common stock. Thus a stockholder holding $500 
worth of stock and a workman earning $500 a year 
are on the same footing, each receiving a dividend 
of $60 a year since January, 1891. Other profit- 
sharing companies are not so prosperous, and few 
have come to the same degree of logical consistency 
as the Procter & Gamble Company, but the four 
hundred or so firms and corporations which prac- 
tise profit sharing to-day in Europe and America do 
make an agreement with their men that, if profits 
are realized in the year to come, a certain propor- 
tion (whether this is made known to the force or 
not) shall fall to the employees, and that the size of 
each man's bonus shall depend upon the amount of 
his wages; practically, therefore, it is a dividend on 



34o Model Industries 

wages that is promised, though the percentage may 
not be the same as that received by the stockholder 
on his stock. This is the essence of profit sharing 
in its developed form as practised by such notable 
corporations as the Baille-Lemaire manufactory of 
opera-glasses at Paris; the South Metropolitan Gas 
Works of London; the Bourne Cotton Mills of 
Fall River, Mass. ; the N. O. Nelson Company of 
St. Louis, Mo., and Leclaire, 111., and the Cincin- 
nati corporation just mentioned. 1 

Four hundred business houses in the whole world 
practising this method are not in themselves a 
demonstration that mankind is soon coming over to 
profit sharing, and it is true that the plan has been 
tried in numerous cases and been given up. The 
chief reason for such abandonment has often been 
the hostility of trade-unions. 

Attitude of Trade-Unions. — This mistaken 
policy of the unions, one may hope, will gradu- 
ally be surrendered by them. The firmest believ- 
ers in the intrinsic rationality of the trade-union 
principle (and I am myself among them) must 
confess that the unions have, in fact, committed 
grievous errors. One of these is their too com- 
mon attitude of suspicion, if not of pronounced op- 
position, to friendly advances from the side of the 
employer, such as profit-sharing plans. Another, 
just now very prominent because of the recent steel 

1 1 mention only these five companies, as they are modern in- 
stances, and may be found described in detail in A Dividend to 
Labor ; the older ones are set forth in my earlier volume on Projit 
Sharing. 



Nicholas Paine Oilman 341 

strike, is their opposition to incorporation, as legal 
persons capable of suing if injured and of being sued 
if injuring others or breaking contracts with them. 
(These, of course, cannot be binding unless the 
unions are incorporated.) In this opposition they 
lose the support of the great mass of economists, 
who believe that nothing could be more wholesome 
for the trade-unions than to have their responsibility 
evened up to their power. Power for good or harm 
they have already, but responsibility for harm they 
disclaim. The public conscience will not be long in 
pronouncing with the economists on this plain issue 
of morals. 

When the trade-unions repent of their present 
illogical and immoral unwillingness to become incor- 
porated and take the right position as corporations 
in that collective bargaining which is to be more 
and more the custom of the future, they will prob- 
ably also lose much of their suspicion and dislike of 
profit-sharing proposals, and a brighter future will 
open before this method of securing industrial 
peace. If, in addition to plans of "industrial better* 
ment," the great corporations will make an effort to 
enroll as many of their employees as possible as 
stockholders, by offering them stock on favorable 
terms, they will do well for themselves. It will 
"pay " in extra dividends to the other stockholders, 
of freedom from strikes, and of friendly interest felt 
by the workmen in the welfare of the concern in 
which they have become part owners themselves. 
Better still will it be if the United States Steel Cor- 
poration, for instance, should set aside some millions 



34 2 Model Industries 

of preferred stock and pay over the dividends on 
this to the workmen as their share of the prosperity 
of the combination. Best of all would it be if the 
principle of a direct dividend to labor were fully 
recognized by all corporations, as it is by the Cin- 
cinnati company I have named, and the workman's 
wages were regarded as the measure of his contri- 
bution to the joint result, a contribution cheerfully 
recognized by the employer and the capitalist as de- 
serving an equal reward with their own. This is an 
ideal desirable on economic and moral grounds, and 
entirely realizable in this twentieth-century world. 

Supplementary Note. — A recent decision by the 
House of Lords, sitting as a law court, has a very 
important bearing on the legal future of English 
trade-unions. I give the statement in the Labour 
Gazette for August : 

" In connection with a dispute between the Taff Vale 
Railway Company and its workmen an action was 
brought by the company against the Amalgamated Soci- 
ety of Railway Servants, a trade-union registered under 
the Trade-Union Acts, and against their secretary and 
organizing secretary, the claim being for an injunction 
and for other relief, which would include damages. The 
injunction asked for was to restrain the society, their ser- 
vants, agents, and others acting by their authority, and 
their officers named as co-defendants, from watching or 
besetting, or causing to be watched or beset, the Great 
Western Railway station at Cardiff, or the works of the 
Taff Vale Company, or any of them, or the approaches 
thereto, or the places of residence, or any place where 
they might happen to be, of any workmen employed by 



Nicholas Paine Oilman 343 

or proposing to work for that company, for the purpose 
of persuading or otherwise preventing persons from work- 
ing for that company, or for any purpose, except merely 
to obtain or communicate information, and from procur- 
ing any person who might have or might enter into con- 
tracts with the company to commit a breach of such 
contracts. The society took out a summons to strike out 
their names as defendants on the ground that they were 
neither a corporation nor an individual, and could not 
be sued in a quasi-corporate or any other capacity. The 
Judge of the Vacation Court refused to strike the society 
out of the action, and granted an interim injunction until 
the trial of the action, restraining the society in the man- 
ner asked for by the company, the costs to be costs in 
the action. 

" The society appealed against this decision, and the 
Court of Appeal allowed the appeal, with costs in that 
court and in the court below. The court held that no- 
thing in the Trade-Union Acts made a trade-union liable 
to be sued in its registered name, so as to enable its 
funds to be taken in execution, and that the action was 
not maintainable against a trade-union. Accordingly, 
the court ordered that the society should be struck out 
as defendants to the action, and that the injunction 
against them should be dissolved. 

" The company appealed to the House of Lords, which 
held that a trade-union registered under the Trade- 
Union Acts can be sued in its registered name, and re- 
versed the judgment of the Court of Appeal and restored 
that of the Vacation Judge, ordering the society to pay 
costs both in the House of Lords and in the court below. 
(Taff Vale Railway Company v. Amalgamated Society 
of Railway Servants and others, House of Lords, July 
12, 15, 16, and 22, 1901.)" 



MODEL INDUSTRIES 

The Associated Workers' Idea 
by n. o. nelson 

BISHOP POTTER'S first question, "How can 
workmen and their employers be helped to an 
understanding of the fact that their interests are 
mutual?" must be answered by another question: 
Are their interests, as such, mutual? In the large, 
as fellow-citizens, as human brothers, their interests 
are mutual, but in their relation as employer and 
hired hand they conflict in a way which may in all 
fairness be called irrepressible. Can there be any- 
thing mutual in the division of a given joint product 
except in one of two ways, by contract or by equal- 
ity? Contract is the present method and leads to 
disputes. 

Because the laborer is not on equal footing with 
the capitalist employer he has formed unions, and 
because the unions have grown strong employers' 
associations have sprung up. Neither of these 
recognizes mutual interest, but only class interest. 
From class interest of a single trade the unions have 
federated into national bodies, and the employers 
in certain trades and in certain cities have joined 

344 



N. O. Nelson 345 

forces for general lockouts and strike benefits. In 
these transitional steps the mutuality has been con- 
fined within the two broad classes. There has been 
conflict enlarged and intensified between "the work- 
men and employers." 

Ameliorating measures, such as unions, voluntary 
arbitration, permanent boards of conciliation with 
powers of investigation and publicity and more or 
less judicial power, are useful and commendable, but 
they cannot go very near to the root of the evil nor 
heal the irreconcilable conflict of interests. 

Even when such agreements are entered into as 
between the bituminous coal operators and miners, 
and in some of the building trades, where the two 
join hands to overcharge the public, there will still 
be the same conflict over the division of the spoils. 
The miner cares nothing if coal is dear to the seam- 
stress or the day laborer. The operator is satisfied 
if combination with the workmen enables him to 
limit the output and raise his profits; but each side 
has a clear self-interest in the division, in the amount 
to be paid as wages. 

Few employers do their worst, some do the best 
they can, none is obliged to be unjust. It is prac- 
ticable for any corporation or individual employer 
to relinquish advantages and power and make him- 
self simply a leader and director, or he may go part 
way and improve the customary conditions; he may 
shorten the hours, improve the equipment, provide 
conveniences and comforts, and divide some part 
of the profits ; no one prevents him. He ought to do 
.it, but will he do it? Despots might be benevolent, 



34-6 Model Industries 

but by the tendency of human nature they have 
usually been tyrannical. Labor must struggle 
for its rights, not individually and alone, but by and 
for the class. As long as there are classes there 
must be a class struggle and need for class con- 
sciousness. 

If, then, there is not in the wage system any 
mutual interest, what are the remedial measures 
available within the system, and what substitutes 
are there for the system? 

Profit Sharing. — Your questions suggest vari- 
ous plans and measures for solving the ever-recurring 
difficulties between capital and labor, and among 
them is profit sharing, to which you ask my par- 
ticular attention. 

Profit sharing in the technical sense means a pay- 
ment to labor of something in excess of wages, con- 
tingent on the general profits. The payment may 
be in money, but better still in an interest in the 
working capital. The object should be to incor- 
porate the employees into the responsible and co- 
working body. To the joint stock capital principle 
should be added the associated workers' idea, capital 
and labor joined in mutual interest and mutual obli- 
gations. Beginning with a small minority interest, 
the workers — including managers — should in time 
become the owners, thus accomplishing what Bishop 
Potter suggests in his letter. 

The theory is valuable chiefly in the recognition 
of a mutuality in the results of joint effort ; practi- 
cally it tends to bring master and men closer to- 
gether, and it commonly leads to ownership by the 



N. O. Nelson 347 

workers. It can hardly be classed as a movement, 
because it depends on the voluntary motion of em- 
ployers who are bred to believe that all profit is the 
legitimate earnings of capital. To give more than 
the contract wages looks to them like charity or 
throwing money away. It has often been adopted 
with a view to getting more work out of men or of 
obviating strikes, but such schemes have rarely sur- 
vived the first or second year. 

Except as a measure of justice it should not be 
undertaken. Where so undertaken it will lead on 
to co-operation and self-employment. This has 
been the course of such famous business concerns as 
Leclaire & Co., house painters and decorators; 
Godin & Co., iron works; Larouche-Joubert, paper 
makers, and "Bon Marche." 

CO-OPERATION. — Profit sharing in its broader 
sense, the equal sharing of all the earnings by 
those who create them, either as customers or 
workers, is embodied in what is technically called 
co-operation. This plan of business is to the com- 
mon people what the corporation is to capital, the 
strength of union and the equality of pure democ- 
racy. It has risen to the dignity of a world move- 
ment, and it can be truly said that in it the 
interests of employer and employed are mutual 
because they are one and the same people. 

In that most eventful decade, 1840 to 1850, when 
transcendentalism in New England, Christian social- 
ism in England, and democratic revolution through- 
out Europe promised so much for oppressed and 
•degraded mankind, twenty-eight workmen of 



348 Model Industries 

Rochdale, England, disciples of Owen and Maurice, 
started a little co-operative store. They adopted 
the unique plan of buying and selling for cash only, 
charging the market price for goods, economizing 
expenses and saving the profits, with a view to ac- 
cumulating self-employing capital. 

I mention this starting-point of Rochdale co- 
operation because it was so wisely conceived that it 
has never been amended; it has spread the world 
over, it is accomplishing what the devoted pioneers 
aimed at, it is equally available to all people, re- 
gardless of class or means or locality. 

Antagonism of Employer and Employed. — 
Underlying religion, politics, and science there is 
the economic question, the means of supplying 
men's needs and desires. Man shall not live by 
bread alone, but he cannot live without it. We 
call subsistence a material means to a spiritual end, 
but it is so primary, so essential, and so difficult that 
it becomes an end in itself. Only a few in any 
community escape from anxiety about making a 
living; if not harassed by the wolf they are haunted 
by fear of it. 

I have stood by the open excavation of the new 
underground railroad in New York City, looking at 
the men digging. They have told me they got $2 
a day for fair days when the work could go on. 
Living is expensive in New York. These are not 
the submerged, they are the men of brawn and 
health. They are the "Labor." 

I have gone through the corridors of the fashion- 
able hotels at midnight hours and looked on the 



N. O. Nelson 349 

diners and winers, the evening dress of men and 
women, with liveried waiters obsequiously serving 
the viands of all lands. These are the ' ' Employers. ' ' 
Are the interests of the two classes mutual? Can 
easy-going optimism conjure up any social relation 
between the two? Can any bridge span the chasm 
between them? 

When I go through our factories and see fine, 
able-bodied, dexterous, earnest men working nine 
hours every day and every year a lifetime through, 
fashioning the uncouth raw material of wood and 
metal and marble into house material, I ask myself, 
"Will the 'laborer ' have any of these polished and 
luxurious appliances in the home of his family, or 
will they only go into the houses of the well-to-do, 
the mansions of the rich, the 'employer' class?" 
Are the interests of the laborer and the capitalist 
mutual in this work? 

I know full well that many will say that money 
payment settles the whole score; but even if that 
were so, is there any mutuality when one makes and 
the other enjoys? "My people shall build houses 
and live in them ; they shall possess the land and 
enjoy the fruits thereof," saith the Lord. 

Summing up: the interests of employees and 
employers are not mutual, but antagonistic; they 
cannot be reconciled, but must be supplanted by a 
system of equity. Contract, the higglings of the 
market, strikes and lockouts must give way to co- 
operation, equality, brotherhood. 

Experience in Leclaire. — The editor asked 
me to forego modesty and give something of my 



35° Model Industries 

own experience. The company with which I am 
connected adopted profit sharing fifteen years ago 
and has continued it satisfactorily ever since. In a 
majority of the years there have been dividends on 
wages of five, eight, or ten per cent, ; in several 
years no dividends. It has given us no trouble 
and no disappointments worthy of record. When 
dull business or new investments have stopped divi- 
dends the employees have taken it in good part, 
which stockholders do not always do. 

Eleven years ago we began building factories in 
the country on a 125-acre tract of land eighteen 
miles from St. Louis, where our general office and 
store still remain. At the same time we started a 
village adjoining. Our aim was to unite the free- 
dom, in all respects, of the country with the con- 
veniences and social advantages of the city. 
Summing up the story, or storiette, to date: Vil- 
lage Leclaire employs 160 men, 30 apprentices, and 
10 girls, one third of whom live in Leclaire, the 
other two thirds living in Edwardsville, a large old 
county town adjoining. 

Two thirds of the Leclaire residents own their 
homes, mostly built by the company and paid for 
by monthly instalments. The houses are of varied 
style, aimed to be pretty, with three to six rooms, 
choice running water, and electric light, mostly on 
lots of one hundred feet front, with fruit and shade 
trees, garden in the rear and lawn and flower beds in 
front. We have winding roads, paved with cinders, 
sprinkled, and bordered with sidewalks and shade 
trees. 



N. O. Nelson 35 1 

We are part of the Edwardsville school district, 
with graded and high school, but we have our own 
kindergarten and a primary class. We have a 
good public hall for semi-monthly lectures, spelling- 
matches, debates, musicales, dancing classes, and 
dances. We have a baseball ground, bowling alleys 
and billiard room, shower baths, fish and skating 
pond, and library. 

We are, at this writing, completing a dining-room, 
evening buffet, and reading and social room adjacent 
to the factories. No charge is made for any of these 
public utilities, the expenses being borne by the two 
hundred workers and employers, the company acting 
as disbursing agent. The president and secretary of 
the company live in Leclaire, with factory workers 
as their only immediate neighbors, and most excel- 
lent neighbors they are. Edwardsville (4200) is part 
of our social life, proud of us, and joining in all our 
activities. We have no political organization, no 
rules, no police, no saloon, no dominating individual, 
no boss. We are social and peaceable from choice. 

Quite a portion of the employees are stockholders, 
and practically all the stockholders are hard workers 
in the business. I think we all consider ownership 
of the factory capital, or even cash dividends, 
secondary considerations, yet the purpose is to have 
the ownership pass into the hands of the workers, 
including all employees. Our different trades are 
all unionized, union wages prevail, and we have a 
nine-hour day in ten-hour trades. Perhaps we get 
as much work done, but why should that be the only 
or chief consideration? 



35 2 Model Industries 

No attempt has been made to force any reform; 
indeed, any particular reform has not been sought. 
By joint action of capital, management, and labor 
the opportunities have been created; the use of 
them has been left entirely to individual choice. 
We have neither coerced nor preached nor excluded. 
Elective affinities, suggestive example, imitative- 
ness have been the makers of social and moral and 
aesthetic Leclaire. 

Our programme is so modest and simple and 
practical that almost any "employer and employed" 
may do likewise if they choose, varying in details 
according to circumstances. 



MODEL INDUSTRIES 

Democracy versus Profit and Prosperity 
Sharing 

by eltweed pomeroy 

NEARLY twenty years ago I introduced profit 
sharing into our factory in Newark for the 
manufacture of writing-inks, etc., and we kept it up 
till 1893, when we had no profits to share. In 1895 
the firm was turned into a stock company and we 
have not since then shared any profits, largely, I 
suppose, because my enthusiasm for it has subsided. 
As I own a majority of the capital stock, I presume 
the directors would advise it if I asked. 

Profit sharing is a good thing in a large concern 
to show the good-will of the employer to the em- 
ployee. It is nothing more unless it grows into real 
co-operation, in which case it is more than profit 
sharing. Profit sharing means the distribution 
among the employees of such part of the profits as 
the owners of the capital may decide, in such a 
manner as they may say. The employees have no 
voice in saying how much or how this shall be given. 
In some cases they are given some volition in this, 
but it is always subject to the veto of the capital, 

353 



354 Model Industries 

and is thus more apparent than real, and the workers 
cannot help but see this. All they have to do is to 
accept. This is the ground of my feeling that profit 
sharing, unless it leads to co-operation, where the 
workman really decides something, is a mild futility. 
It is not democratic. The workmen do not achieve 
something for themselves. 

In our experience we closed our books on January 
1st, and by the middle of January the certificates were 
given to the men, and if they left the money with 
us they were paid one-half per cent, a month, which 
is six per cent, a year and nearly double what they 
could get in the savings-bank. Nearly all of them 
drew it out at once and spent it. We then gave 
nothing at all at Christmas, because we felt that the 
profit sharing would come later and we wanted this 
to be on a business basis. When we stopped the 
profit sharing we commenced giving out turkeys on 
Christmas eve, and at a wedding, death, or some 
special event would give the employee a present in 
money or some special help. This has more than 
replaced the profit sharing as a method of showing 
good feeling from employer to employee. We have 
also occasionally given a picnic or a supper, and 
they have been admirable for creating good feeling, 
better than the rather cold profit sharing, which I 
doubt if we ever go back to. Ours is only a small 
factory, employing from twenty to thirty hands. 

Objection to Profit Sharing.— If profit 
sharing led on to a genuine co-operation, where 
the men shared in the management and suffered 
from their joint mistakes and benefited by their 



Eltweed Pomeroy 355 

own good management, in other words, if it led 
to a democratic instead of an autocratic conduct of 
business, I would be really enthusiastic over profit 
sharing; but co-operation is not profit sharing, but 
something more. In our experience I tried to make 
profit sharing lead up to co-operation, but was 
hindered by the apathy both of business partners 
and also of the employees, but more particularly of 
the latter. They lacked initiative — both desire and 
ability to share in the management. My knowledge 
of other profit-sharing experiments, which is wide 
in the literature on it and intimate in some few cases, 
confirms my own experience. 

I have visited many of the so-called "model in- 
dustrial settlements." I heartily appreciate the 
spirit back of them, but I have the same kindly 
criticism to make of them that I do of profit shar- 
ing. As long as they are only a better environment 
prepared for the working man by his employers or 
superiors in wealth in which he has not a deciding 
voice they are at their best benevolently good and 
at their worst the exercise of industrial tyranny. 
But as soon as the workman is admitted to a share 
in the management of these settlements or indus- 
tries, just so soon do they become of real value to 
him. In other words, their real value to the work- 
men depends on the amount of democracy diffused 
into the business. 

Dangers of Industrial Autocracy. — Curi- 
ous as it may seem, in our industrial affairs we 
are in a period of decreasing democracy in their 
management and of great, but, I believe, temporary 



356 Model Industries 

brilliancy. The great factories and combinations 
are freezing out the small makers and small dealers. 
It used to be comparatively easy for the average 
efficient worker to get a small shop of his own and 
do a small but prosperous business. That day has 
passed or is rapidly passing in almost all lines. In 
past days the fact that any workman might become 
a master brought about a democratic spirit in the 
small shops. But in a great factory the executive 
cannot know his men and must be far more auto- 
cratic. The result has been a stopping in the lower 
ranks of our industrial life of that most precious of 
all things, the power of individual initiative. In 
the middle and upper ranks of our industrial life the 
men who have grown up in this democratic atmo- 
sphere of individual initiative and who, having real 
ability, have been brought out and developed by it 
have been drawn into the circle of executive direc- 
tion and are giving great force and brilliancy to that 
direction. But all men are human, and these men 
will die off in time. Where are their successors to 
come from? The atmosphere and training which 
brought out and developed our present industrial 
leaders are rapidly vanishing. 

We are to-day doing in our industrial affairs what 
Louis XIV. did in France in political matters a few 
centuries ago. Coming at the end of a democratic 
age which produced many men of power and initia- 
tive, he centred all power in himself and drew to 
his court all the brilliant men of his age. The re- 
sult was one of the most brilliant periods of French 
history, but his autocracy prevented the growth of 



Eltweed Pomeroy 357 

other great men, and the end of his reign was almost 
as sterile in ability around the throne as the begin- 
ning was plentiful in it. 

Because of the rapidly developing complete au- 
tocracy in our industries the passage of one or at 
most of two generations may see our industries led 
by as inefficient men as to-day they are led by effi- 
cient ones, and then they will only have the inertia 
of past successes to carry them on. The barrenness 
of the reign of Louis XV. and of Louis XVI. will 
symbolize our industrial condition then, and it may 
be well if it is not followed by such a cataclysm in 
industry as the French Revolution was in politics. 
To be permanently successful we must have demo- 
cratically conducted industry as to-day we have 
democratically conducted politics. 



PART VI 
SOCIALISM AND SINGLE TAX 



359 



SOCIALISM AND SINGLE TAX 

SYNOPSIS 

Hardie. Condemns trusts — Profit sharing objectionable from 
union standpoint — Co-operation of limited applicability — State 
ownership and control of land and capital. 

Jones. Right of all to work — More equal sharing — The few have 
no right to enjoy immense profits at expense of the many — Next 
step co-operation in distribution — Public ownership of railroads. 

Chase. Condemns trusts — Trusts a step toward socialism — Indi- 
vidualism disappearing — Socialism next step. 

Bliss. Actual conditions — Real conflict — Proposed remedies inade- 
quate — Benefits of trade-unionism — Does not solve problem — 
Socialist party with national programme — Public ownership of 
natural monopolies — Next step after trusts. 

Hall. A parable — Definitions of capital and labor — The burden 
of special privileges — Social value of land ownership — Benefit 
of strikes — Objections to socialism — Restore land to laborer — 
Single tax — Abolition of monopolies. 

Crosby. War of capital and labor — Social and economic in- 
equalities — Wage-earner's share inadequate — Effects of machin- 
ery on labor — State socialism not the remedy — Trusts and 
monopolies the result of special privileges — Single tax — Free 
banking and free trade — Equal opportunities versus monopoly 
of opportunities — Trade-unions a means of education of workers; 
a counterpoise to monopolies. 



361 



SOCIALISM AND SINGLE TAX 

Public Ownership of Land and Capital 
by j. kier hardie 

NO more serious question could engage the at- 
tention of statesmen and leaders of thought 
than that which stands at the head of these articles. 
Students of social conditions are becoming seriously 
alarmed at the growing power and arrogance of 
capital. 

All business carried on for gain is necessarily 
cruel and selfish. So long as it is conducted on a 
moderate scale by small capitalists the human ele- 
ment operates to some extent in keeping its rapacity 
within bounds. When, however, business passes 
out of individual control and merges itself first into a 
company and finally into a trust, it becomes an anti- 
human monster, void of feelings, of compassion, or 
bowels of mercy. In these days of fierce and keen 
competition among nations there is no room for 
sentiment in the relations subsisting between em- 
ployer and employed. The capitalist, to be 
successful, must be absolute in his control of his 
business. Workmen who have been accustomed to 
considering themselves the equals of their employers 
363 



364 Socialism and Single Tax 

are learning that that order of things is passing 
away. 

Take for example the most recent illustration — 
the dispute between the Steel Trust and its work- 
people. Before the strike actually commenced I 
was interviewed by the London representative of an 
American newspaper and asked for an opinion as 
to the probable outcome of the strike. My opinion 
was that the workers were bound to be defeated. 

So long as the number of workmen on strike is 
comparatively small they can be supported by their 
fellows who remain at work, but when the number 
out can be reckoned by the hundred thousand any 
idea of supporting them becomes out of the ques- 
tion. Besides the trust is superior to all considera- 
tions of public opinion; knowing itself to be master 
of the situation it pursues its way relentlessly until 
the workmen, crushed and submissive, are glad to 
accept its terms. 

It is to me a matter of great regret that my fore- 
cast has been only too well realized. It is not only 
in the industrial sphere, however, that the power of 
capital is menacing the freedom of the subject. 
Behind every government, republican or monarchi- 
cal, stands the financier, dictating the policy to be 
pursued and brooking no denial. Since 1850 the 
great banking house of Rothschild alone has pro- 
vided Great Britain with loans amounting to 
£200,000,000; Austria, £50,000,000; Prussia, £40,- 
000,000; France, £80,000,000; Italy, £60,000,000; 
Russia, £25,000,000, and Brazil, £14,000,000. The 
paymaster is always boss. 



J. Kier Hardie 365 

It was an interested group of capitalists who 
rushed the United States of America into war with 
Spain over Cuba — just as a similar group has 
hounded Great Britain into the murderous war now 
being waged with the republics of South Africa — 
a conflict, by the way, which threatens to bleed the 
Empire white. 

As I write news is filtering through of renewed 
atrocities in the Far East of Europe. The unhappy 
Armenians are again being massacred wholesale by 
the bloodthirsty Turk, whose policy it is to wipe 
that hardy race from off the face of the earth ; but 
there is no outcry in this country against such bar- 
barities. In fact, there seems a conspiracy of 
silence to prevent the truth becoming known. 
When, in 1898, the late W. E. Gladstone, from the 
seclusion of Hawarden, sought to rouse the con- 
science of Europe on this very question, the Right 
Honorable, the Earl of Rosebery, his successor in 
office, acting as the spokesman of the bondholders 
of Turkey and Egypt, whose representative he is, 
terrorized the nation into non-action by picturing 
the fearful results which would follow intervention. 
At that time every one knew that what his Lord- 
ship was thinking about was not the results which 
would accrue to the nation, but the loss which 
would be felt by the Rothschilds and other finan- 
ciers whose interests were at stake. 

The inevitable trend of capitalism, whether indus- 
trial or bonded, is toward concentration. Between 
the holder of shares or bonds and the actual producer 
of dividend and interest come a long array of 



366 Socialism and Single Tax 

intermediaries, so that all sense of responsibility on 
the part of the recipient of interest toward its pro- 
ducer is wanting. To the lack of this responsibility it 
is due that the workman is being gradually reduced 
to the status of an inanimate bit of machinery. His 
independence is being lessened and his sense of free- 
dom destroyed. In the absence of the free play of 
the forces of action and interaction which follow 
competition in the open market both producer and 
consumer are at the mercy of the capitalist. 

The problem is, then : How to insure that capital 
shall be the servant, not the master, of the com- 
munity; the partner with labor, not its oppressor. 

Profit Sharing. — Various schemes have been 
propounded for coping with this difficulty. Profit 
sharing has been advocated, but has not been gener- 
ally successful. In cases where the employer is able 
to personally supervise the working of the system its 
evils are not so manifest, but where the employer is 
a company the conditions which attach themselves 
to a system of profit sharing are such as to produce 
servility and sycophancy among the work-people. 
One condition usually attached to a system of profit 
sharing is that trade-unionism must be abandoned. 
Those who have studied the condition of the work- 
people of a great concern in which profit sharing 
obtains feel that whatever gain the workmen may 
have secured in wages they have paid for it in the 
sacrifice of their independence. 

Co-OPERATION. — Co-operative production is a 
more hopeful experiment. Here the work-people 
actually control the factories in which they work and 



J. Kier Hardie 3^7 

own in whole or in part the capital employed. Ob- 
viously this method has its limitations, and is not 
likely to become so universal as to solve the problem 
which we are attempting to discuss. Of late certain 
unions, chiefly connected with the building trades, 
have gone into business on their own account, and 
the experiments have been fairly successful; but 
here also the application of this method is strictly 
confined to certain businesses. 

Municipalization. — The most successful efforts 
in the direction of solving the problem are those 
which are associated with the municipalization of 
certain industries. In all our big cities the municipal 
council owns and manipulates the water supply, gas, 
electricity, trams, etc. In such cases there is no con- 
flict between the capitalist and the consumer, since 
they represent the same set of individuals. The 
worker, however, is still an employee, but the 
universal experience is that his conditions of em- 
ployment — in respect to hours, wages, etc. — are 
immensely superior to those enjoyed under private 
firms. Strikes are almost unknown on the part of 
municipal employees, the reason being that when 
the workmen have any real grievance they have 
usually public opinion on their side, which in turn 
influences the city council, and thus secures redress. 

Public Ownership the Solution. — This, 
then, is my solution of the difficulty. 

The three main factors in production are land, 
labor, capital. So long as those are owned by 
different sets of individuals conflicting interests are 
set up and strife and oppression are inevitable. By 



368 Socialism and Single Tax 

making land and capital public property they have 
no interest apart from that of the well-being of the 
general community, and I see no other means of 
solving our industrial problem save that advocated 
by the socialists. 

If it be objected that this would be to create 
monopoly, the reply is obvious; the ownership of 
land and capital is already a practical monopoly, 
but it is a monopoly not controlled by the com- 
munity. When land and capital are publicly owned 
there will be a monopoly still — a monopoly, how- 
ever, belonging to the people, controlled by the 
people, in the interests of the people. 



SOCIALISM AND SINGLE TAX 

Equality and Co-operation 
by samuel m. jones 

ARE the interests of employers and employed 
mutual and identical? Yes — or there is no 
God; or if the interests of employer and employee 
are not identical, if the good of one means the harm 
of the other, then there must be two Gods — the 
God of the working man and the God of the boss. 
One of these two conclusions is absolutely neces- 
sary. The only alternative is to reject the idea of 
God entirely and then we have confusion and never- 
ending despair. This, then, is my fundamental con- 
clusion, and upon it and true to it I try to build a 
rational philosophy of relation between myself and 
all humanity. 

There is one divine source of all life, of light, and 
truth. This source we call God or Good, the all 
father, or the father of all. This makes the entire 
race — all colors, creeds, and conditions — a brother- 
hood, and their mission on earth is to learn the les- 
son of harmony, to learn to live brotherly. The 
Golden Rule is the original of every decree of hu- 
man liberty that has ever been spoken, and only as 
24 369 



37° Socialism and Single Tax 

we base our conclusions upon it and build our social 
and political relations true to its exacting demands 
can we hope to make any progress in the settlement 
of the industrial question, or take one step toward 
political peace and social justice. It was this con- 
clusion that about six years ago led me to put the 
Golden Rule up on the walls, as the rule that should 
govern in our factory. It was not a spontaneous 
outburst of "goody goodyism," or "googooism," 
or anything of the sort. It was the New Birth that 
brought me to understand that the law that governs 
my relation with my fellow-men is as unerring and 
inexorable as the rules that govern arithmetic. 

We are yet in the childhood period of the life of 
the race. For centuries mankind has been striving 
to find a short-cut way or quick-acting specific that 
would give the world the peaceful relation for which 
the soul longs, and we are beginning to learn that 
there is no substitute for justice, that right and 
wrong, like oil and water, will not mix, and that 
they cannot abide together in peace. The apparent 
never-ending strife between capital and labor is 
nearing its end. Never in the history of the world 
has public sympathy been so fully with the toilers 
as at the present time. The forces are now appar- 
ent that in due time will carry out the peaceful 
solution of the labor question in the only rational 
way that it can ever be settled, that is, with a recog- 
nition of the fundamental principle of equality and 
its application to industry through co-operation. 

The introduction of labor-saving machinery dur- 
ing the last fifty years has done much to lighten the 



Samuel M. Jones 37 l 

burden of human toil. The next rational step is the 
adoption of the shorter work-day, which must be- 
come shorter and shorter as machinery is multiplied 
until there shall be such a division of labor as will 
make accessible to all the God-given right to work, 
for, as it is the mission of the nation to produce 
great persons, we must understand that healthy, 
able-bodied men and women cannot be reared by 
growing them up in idleness. Unless the hands are 
used for the purpose for which God intended them, 
how can we use the brain for the purpose for which 
it was intended? The meaning of this is that the 
whole man, all men and all women, in whatever con- 
dition, have a right to work, have a right, indeed, to 
become co-workers with God in the establishment of 
the Kingdom of Harmony (Heaven) here and now, 
in this life and on this earth. 

Co-operation in Distribution next Step.— 
The trusts are making the application of the co- 
operative principle in the field of production, they 
are abolishing the warlike methods of competition 
and eliminating its dreadful and costly waste. Any 
combination of men and materials that saves labor 
and lightens the burden of human toil is in the line 
of progress and ought to be encouraged, but the 
trust-makers have not reckoned on the next step, 
which is just as inevitable as the step that led to the 
formation of the trusts. This next step is co-opera- 
tion in the field of distribution and the saving 
effected by the development of labor-saving ma- 
chinery, and the organization of the trusts does not 
belong alone to the trust-makers. This saving is a 



37 2 Socialism and Single Tax 

social product because it would not be possible ex- 
cept for the combined efforts of employer and em- 
ployed alike. Indeed, it would not be possible 
except for the combined labors of hundreds and 
thousands of men and women who have gone before 
and who have delved in the dangerous mines, swel- 
tered over the fierce heat of burning furnaces and the 
melting crucible to unlock the secrets of nature and 
make the crude ores into highly specialized machines 
which produce the marvels of modern industry. All 
of these labors of these unnumbered thousands who 
have gone before have made possible the triumphs 
of the modern man over the sources of nature. 

It is a crime, not against the revised statutes, 
but against Almighty God, for a few men to claim 
the enormous profits that are made possible through 
this social energy as their own, for individual private 
use, for the gratification of a depraved taste for vul- 
gar luxuries, which in the end result in destroying 
the man, both soul and body. These profits are a 
social product, and should and will yet be socially 
owned and distributed in the way best calculated to 
build up the citizenship of the nation. This is to be 
brought about by a gradual process. The shorter 
work day is a step toward it, and the next step in 
the development of industry is the adoption of a 
system of co-operation in the field of distribution 
that will recognize the principle to which our govern- 
ment is dedicated, and upon which all humanity 
must be saved or forever lost. That principle is 
equality of all men and the right of the humblest 
citizen — yes, the right of every baby born on the 



Samuel M. Jones 373 

planet to have access to everything needed to de- 
velop in that baby the highest possibilities of 
citizenship. 

The sooner employer and employed recognize 
and strive to build true to this principle of equality 
the better it will be for the peace of mind of the in- 
dividual and for the welfare of the nation. 



SOCIALISM AND SINGLE TAX 

The Abolition of Competition 
by john c. chase 

THE attempt to reconcile labor and capital and 
still maintain present industrial systems is 
much like trying to bring about the time when the 
lion will look with brotherly tenderness and affec- 
tion upon the meek and humble lamb. So long as 
there is an untamed lion roaming through the 
wilderness seeking what or whom he may devour, 
just so long will the gentle lamb be his victim. The 
lamb is not reconciled ; the lion does not want to be. 

Just so long as we have an industrial system based 
upon intimidation, violence, and legalized theft, so 
long will labor and capital remain unreconciled. 
Labor will not become reconciled, because it means 
the acceptance of annihilation. Capital does not 
want to be reconciled, because it would mean the 
abandonment of the privilege of supremacy and op- 
pression. Labor creates, capital confiscates, under 
our present system. 

Lincoln said that "labor is prior to and indepen- 
dent of capital. Capital is only the fruit of labor 
and could never have existed if labor had not first 

374 



John C. Chase . 375 

existed. Labor is the superior of capital, and de- 
serves much the higher consideration." What 
would Lincoln say to-day were he here to partici- 
pate in the solution of this problem? He would 
say just what every socialist says: Abolish class 
distinction by making every laborer a capitalist and 
every capitalist a laborer. 

The two classes, one which produces all and gets 
nothing, and one which produces nothing and takes 
all, can never become reconciled. The solution of 
the problem lies in the entire abolition of capitalism 
or competition, and the substitution of socialism or 
co-operation. Then there will no longer be the 
laborer and the capitalist with hostile interests, but 
one universal brotherhood of mankind,, working in 
harmony, unified and reconciled. Labor — and in 
the term I include all who do any useful work by 
head or hand — will create all and enjoy all. Then 
capital, which is nothing but accumulated labor, 
will be public, instead of private, property. 

Have all industrial enterprises run in co-operation 
instead of competition ; give every one an oppor- 
tunity to labor and bring out the best there is in 
him ; give to every one according to his deeds, and 
there will no longer be this problem of reconciliation 
between labor and capital. 

That the day is fast approaching when the capital- 
ist system will give way to socialism no student of 
economics will for a moment deny. It must be the 
next step in the onward march of civilization. As 
has been said by our most illustrious statesman, this 
nation cannot live half slave and half free men. 



37 6 Socialism and Single Tax 

Evidence abounds on every side that the people are 
awakening to the fact that freedom must be given to 
the enslaved toilers of the land. From press, pulpit, 
and platform comes the appeal for better conditions 
for all mankind. The world is rapidly nearing 
socialism. 

Carroll D. Wright very truly says that three forces 
are involved in the economic trend toward socialism : 
first, socialism; second, organized labor, and lastly, 
capital itself. This is absolutely true. Socialism is 
here asserting itself. Organized labor is growing in 
strength and power, and with its growing strength 
comes the knowledge that there is no goal short of 
the co-operative commonwealth. And lastly comes 
capitalism itself, which can be likened to the reptile 
which devours itself, fast ushering in the day of its 
own destruction. 

In all the concentration of industry and wealth 
in the hands of a few which manifests itself in the 
form of trusts and combinations we find the shadow of 
socialism lurking. The trusts of to-day are a potent 
power in bringing about the dawn of the new era in 
the industrial world. Every trust organized, every 
combination effected is a part of the great evolution- 
ary work now going on which will culminate in the 
completer organization of industry upon the lines 
which socialism represents. 

The day of individualism is fast disappearing. A 
few financial kings hold the destiny of the whole hu- 
man family in their hands. This few is growing less 
in number and the lessening number growing more 
powerful. Eventually, none will be so blind that 



John C. Chase 377 

they cannot see that their power must be transferred 
from the few to the many. When concentration 
under capitalism has reached a certain point; when 
it shall become plain that a few individuals or fami- 
lies have virtual control of all the means of produc- 
tion and distribution, then will it become plainly 
apparent to all that the transformation from private 
to public ownership of these means must take place. 
This will be necessary for the public good, and 
whatever becomes necessary of accomplishment for 
the public good always has been and always will be 
accomplished. 

Just how this is to be done is largely a matter of 
education and development. The capitalists are 
doing their part, unwittingly, perhaps, but surely, 
nevertheless. It remains the duty of the people to 
do their part, and they will rise to the occasion. 
Capitalism is already socialism for the few. It must 
be made socialism for the many. When this time 
comes there will no longer be the present class dis- 
tinction and class struggle on economic lines. When 
this time comes, labor and capital will be reconciled, 
for they will then be one and inseparable. 



SOCIALISM AND SINGLE TAX 

How to Unite Labor and Capital in the 
Same Man 

by w. d. p. bliss 

WHAT do we mean by " reconciling labor and 
capital"? If we take the words in their 
strict sense there is no need of reconciliation, be- 
cause there is naught to reconcile. No hoe ever 
quarrelled with its user. But usually those who use 
the phrase mean reconciling one nran who owns the 
hoe with another man who wields it, and this is a 
very different question. It is well to sing the 
praises of capital and show what it has done for the 
world ; how it has made it possible for man to girdle 
the globe, erect the home, spread the table, build 
the library, span the continent. Without capital 
man is a savage (though a free savage may be 
happier and nobler than a prisoned heir of all the 
ages). Capital is power. 

It is also well for people whose work is interesting, 
work of the head and heart, to sing paeans about 
"the divinity of labor, the nobility of toil." Labor 
is divine, provided it be creative labor, for every 
laborer should be a god. The world were a hell, 

378 



W. D. P. Bliss 379 

and a hell without hope, if man could not work with 
a heart in his work. (Shame on us that so many of 
our brethren live and die in that hell, some finding 
that hell on Fifth Avenue, some in East Side tene- 
ments.) Labor of the right kind is noble. 

But such language becomes false, insolent, damn- 
able alike to those who use it and those who listen 
to it, when under the guise of lauding the functions 
of tools and of work is covertly, sentimentally, or ig- 
norantly built up a defence of a condition of affairs 
where one set of men own nine tenths of the tools 
and another set of men do nine tenths of the work. 
Air and lungs are both necessary to life, but when 
the air is on top and the lungs are down in a Black 
Hole, men die. And when those enjoying the free 
air shout down to the men in the hole learned essays 
or sentimental talk about the wonderful mechanism 
of the lungs and the marvellous composition of the 
air, it is no wonder that men dying for lack of air 
grow angry, indignant, anarchistic. 

The problem of the century is not to reconcile 
labor and capital, nor to make one set of men con- 
tent without capital and another set of men (or their 
wives and daughters) content without labor; the 
problem is how to unite labor and capital in the 
same man. This is the aim of what is called social- 
ism, and socialism will not down (no matter how the 
mistakes and follies of socialists may delay the issue 
till every man has a due share of capital and every 
capitalist does his share of useful creative work. 

How can this end be reached? Most people will 
admit its theoretical desirability; how can it 



380 Socialism and Single Tax 

practically be accomplished? This is the question 
to-day before civilization. 

Education. — Some people will answer by various 
forms of the mental, moral, and manual education 
of wage-earners, to make them more capable of 
acquiring, keeping, and making good use of capital. 
Education ! Yes ; who will say aught against educa- 
tion? But, like liberty, what crimes are committed 
in its name! All need education, and among others 
the capitalist, the ecclesiastic, and the economist. 
We should like to see schools of manual training 
for capitalists as well as for wage-earners; schools of 
political economy for ecclesiastics as well as trade- 
union leaders; schools of moral sense for economists 
as well as for those environed by physical slums. 
Who need education the most, it is hard to say. 
But will education, in the ordinary sense of the 
word, solve the economic problem? We answer no. 

Education of the right kind may enable one man to 
climb on the shoulders of his fellows who have less. 
Knowledge is power. Those who see an educated 
wage-earner climb out of his class into the class of 
capitalists are apt to say, " Teach all men to do the 
same, and life's problem is solved." But let us re- 
vert to the Black Hole, for in such a state of affairs 
we are. Where men are wriggling, striving, shoving, 
battling to get near to the little air there is, if you 
infuse into a few men new strength and ability it 
will undoubtedly enable them to get nearer the top, 
and possibly out of the hole; but if one gets up and 
out by shoving other people down and in, is there a 
net advance on the problem of relief to the world? 



W. D. P. Bliss 381 

Yet such is the situation so long as life is a scramble 
of competition, with survival only for the most dex- 
terous wriggler. 

John Stuart Mill long ago pointed out that in a 
race, if one man removes his coat and the others 
do not, the coatless man has the advantage, but 
that if all should do the same it would but make 
the struggle more severe. Education may re- 
move some obstacles from the path of individual 
competitors and enable them more cunningly to trip 
or defeat their rivals, but if all men were educated 
and the system of competition were unchanged, it 
would but make the race of life more desperate and 
severe. A wiser than Mill eighteen centuries ago 
declared that the development of self was not the 
path to heaven. They who would come to God's 
life must lose their selfish life. Sacrifice, not self- 
development, is God's path to individuality. Eco- 
nomics, common-sense, and history indorse the 
words of Christ. Those who have sacrificed are the 
great ones of history. 

Profit Sharing. — Others say, let us develop 
various forms of profit sharing and gradually make 
the worker share in the benefits of capital. This, 
too, is well, but is it a solution? Business to-day 
is notoriously consolidating at gigantic bounds; a 
few men are coming to own, or at least control, the 
commercial world. With that giant fact before us, 
is it aught but mockery to try and meet the situation 
by offering to dole out little fractions of capital to the 
hungry millions? When a few men monopolize even 
the air (for does not the owner of an East Side tene- 



382 Socialism and Single Tax 

ment, himself living, perhaps, in a healthy suburb, 
become a monopolist of the air?) — when, we say, 
monopoly is in the air and controlling the air, is it 
any consolation to say to the men in the Black Hole : 
"If you will serve our interests the better and give 
us an increasing amount of the air of the world, we 
will allow you people 'in the hole' to have a tiny 
portion of our increasing amount "? 

Trade-Unions.— Still others say develop trade- 
unions. Let capital organize and labor organize and 
then arbitrate between the two. This, too, is well. 
Education, profit sharing, co-operation, trade-union- 
ism — all are well, and the last, perhaps, economically 
the best. Wages in America are high or low about 
in proportion to the extent to which the wage-earners 
in any craft are or are not organized in trade-unions. 
He who opposes trade-unions, if honest, is ignorant. 
Trade-unionists make mistakes, commit follies, do 
wrong, but so do capitalists, and at least as often. 
Trade-unionism all serious thinkers to-day believe 
in. Experience has taught the wage-earner that 
the trade-union, even if occasionally despotic, is, in 
the long run, his securest defence to-day against the 
greater despotism of the employing corporations. 
But can the most optimistic believer in trade-unions 
argue that here is the one path to salvation? Can 
trade-unions to-day equal, or begin to equal, or ever 
hope to equal the power of organized capital? 
Trade-unions are gaining. They are learning by 
their experience and profiting by their mistakes. 
They gain slowly. But capital is consolidating at 
giant bounds. Can the snail overtake the hare? Not 



W. D. P. Bliss 383 

unless the hare be stopped. Trade-unionism alone 
will not answer. 

A Lesson from History. — What else can be 
done? Let me answer by an illustration with a few 
facts: 

In the days of the struggle against chattel slavery 
the problem was how to free the slave. Men argued 
that it could only be done gradually; that the slave 
was not competent for freedom — a contention partly 
justified by the results. Then, as now, it was 
shown that the interests of slave and slave-owner 
were mutual. If the slave-owner treated his slave 
well, gave him more corn and mush, let him go to 
the "nigger" chapel on Sunday, it was for the slave- 
owner's good. The well-treated slave was likely to 
produce more cotton; above all, he was more likely 
to remain in slavery. Property was worth preserv- 
ing. It paid the slave-owner to be kind. On the 
other hand, it was argued that it paid the slave to be 
industrious, temperate, respectful, submissive "to 
his betters." If the slave produced more cotton he 
could usually get more mush. If he smiled when 
the taskmaster thrashed him he was not quite so 
likely to get a thrashing the next day. If he licked 
his master's boots he might even be allowed to live 
in the vicinity of the master's house, and get the 
crumbs from his table. Fawning and especial in- 
dustry was for the slave's own good. Such argu- 
ments were common in economic writings and in 
sermons North and South. 

By others it was argued that the thing to do 
was to get the slaves individually out of slavery 



384 Socialism and Single Tax 

and into Canada, and so an underground railway 
was organized by kind-hearted men and women and 
a few slaves were helped to liberty. But, unfortu- 
nately, the government was largely under the influ- 
ence of the slave power, and it used the power of 
government to hunt and return to their owners most 
of the slaves who struck, much as the army is used 
to-day in our strikes. 

A growing number said that something must be 
done, but that we must do not much or society 
would go to pieces and the country be ruined. And 
so the Whig party gave us Missouri compromises 
and Dred Scott decisions. Yet somehow the com- 
promises only compromised their framers and the 
decisions decided nothing and the struggle went on. 

Still others argued in favor of slave colonies and 
republics in Liberia and elsewhere. The slaves 
themselves made a few noble but futile efforts. 

Still others argued that slavery was not an evil to 
be met, but a sin to be left. Through government 
nothing could be done. The very Constitution was 
a "covenant with death and an agreement with 
hell." Such argument was very stimulating and 
set people to thinking, but the sin went on. 

At last, one day, at Warsaw, New York, a few ear- 
nest men formed a Liberty party. They made but 
a small beginning and innumerable mistakes. At 
their first election they only polled 7059 votes over 
the whole country. Their own candidates declined 
their nominations. At their second election they 
succeeded only in defeating Clay and electing Polk, 
and thus making Texas a slave State. After that 



W. D. P. Bliss 385 

election they went to pieces. It all seemed "infi- 
nitely pathetic." Nevertheless, in place of the Lib- 
erty party came the Free Soil party and by and by 
the Republican party and the war and the liberation 
of the slaves. 

Must history repeat itself? The good, cautious, 
sensible Whigs who wanted to do things very gradu- 
ally forgot one thing. They forgot that the slave 
question was a moral question and that against that 
moral element compromises, compacts, even the de- 
cisions of courts, were as naught. The Whig party 
knew not the day of its visitation ; neither the policy 
of a Clay nor the genius of a Webster could save it 
against the Truth. 

On the other hand, the men who stood for princi- 
ples without measures, who would not work through 
government at all because the government was not 
perfect, were useful as agitators, but did not free 
the slaves. A party that dared to stand for principle 
applied in practical measures did free the slaves. 

The Political Method. — What shall we do? 
There is no one short cut. But shall we ignore 
the political method? Shall we sneer because its 
beginnings are weak? Shall we be hopeless because 
some of the labor leaders in trying to play at poli- 
tics show poor judgment against the shrewdest 
men organized capital can pick out? Slow meas- 
ures might be the wisest if the situation would 
allow. But those who advocate simply education, 
profit sharing, etc., forget one thing. They for- 
get what the Whig party forgot, that the present 
economic problem is a great moral issue, which 



386 Socialism and Single Tax 

the logic of events is steadily and rapidly forcing to 
an issue. 

Capital is consolidating from Maine to California; 
trusts are being formed in almost every line of in- 
dustry ; the means of continental transportation are 
passing into fewer and fewer hands; the power of 
monopoly is steadily extending over hall and bench, 
over pulpit and press, over commerce and the ballot. 
As far back as 1871 not a socialist, but Charles 
Francis Adams wrote : 

" The system of corporate life and corporate power is 
yet in its infancy. It tends always to development ; al- 
ways to consolidation ; it is ever grasping new powers or 
insidiously exercising covert influences. Even now 
[187 1] the system threatens the central government. . . . 
The belief is common in America that the day is at hand 
when corporations far greater than ever — swaying power 
such as has never in the world's history been trusted in 
the hands of mere private citizens, controlled by single 
men like Vanderbilt, or by combinations of men, like 
Fiske, Gould, and Sage — after having created a system 
of quiet but irrepressible corruption — will ultimately 
succeed in directing government itself." 

Has that day come? 

Against such a situation is it a sufficient answer to 
frame pretty words about reconciling capital and 
labor? Can trade-unions, co-operative colonies, 
profit-sharing schemes, boards of arbitration, even 
capitalist-owned churches and schools, meet the 
issue? Is it for men who would really serve the pub- 
lic need to cry peace, peace, when there is no peace? 



W. D. P. Bliss 387 

For our part we answer that the only power capa- 
ble of meeting the situation is the concerted moral 
sense of the whole people. In this we have faith. 
The American people are not yet enslaved. In 
1896 on a partial issue and with a confused lead 
more than half the white native vote of the country 
was cast against the party which it believed to be 
the party of the trusts. In 1900, under circum- 
stances still more complicated, the same result was 
approximated. Is it Utopian to believe that in the 
near future, on the plain question of public co-opera- 
tion through government — i. e., of public ownership 
of monopolies against the trusts — an overwhelming 
majority of the plain people would be against the 
trusts? The first great party that sounds forth that 
note, standing for principle on practical measures, 
will win the day. 

This is no plea, however, for a Utopian class-con- 
scious socialist party that strives to apply to Amer- 
ica a German theory. It will take the moral instinct 
of the whole country to down the power of the 
trusts. It must be an American party, believing in 
our country, inheriting the best traditions alike of a 
Jefferson and a Lincoln. It must be no class upris- 
ing. With the principle of brotherhood for all and 
malice toward none it must unite the Anglo-Saxon 
genius for practical construction and constitutional 
development. A practical programme of public 
ownership for the city and the nation is the only 
way to unite labor and capital on the basis of equity 
and in the limits of the practical. 



SOCIALISM AND SINGLE TAX 

Restoration of the Land to the Laborer 

by bolton hall 

AGAIN the Interpreter took me by the hand and 
showed me two that contended together for 
the ledge of a hill that had been made narrow by 
digging away the bank, anr the Interpreter said : 
"They are father and son." 

And one took the other by the throat, and pressed 
him with intent to throw him down. And as I 
looked, behold, he that was pressed gave ground and 
stumbled where the earth was cut away, and both 
fell together and perished miserably in the abyss. 

Then said I, shuddering, to the Interpreter: 
"Who be these? " And the Interpreter said : "The 
father is labor, and the son is capital, and they 
struggled together, for each thought that if the 
other fell, himself would rise." 

If the interests of father and son are not identi- 
cal it must be owing to some wrong state of affairs; 
and to enable labor and capital to see that their 
interests are naturally mutual it is only necessary to 
discover and correct that wrong state of affairs. 

388 



Bolton Hall 389 

At present they are disputing about wages — not on 
the whole because they want to do so, nor because 
either capital or labor is bad, but, mainly, because 
they have to. Some laborers are well paid and get 
more than they need to live on ; if they do, it is be- 
cause something saves them from the compulsion of 
the competition of other workers. Some capitalists 
make large profits and could afford to pay higher 
wages; if they could pay higher wages, it is because 
something gives them an advantage over the other 
capitalists, whose competition they have to meet, 
and so saves them from that compulsion. 

Meaning of Labor and Capital. — But, as we 
think about the relations of capital and labor, we 
must be sure that we mean the same things by 
labor and capital. If you reason of labor, meaning 
only carrying a hod or working at a trade, and I 
mean by labor practising law and writing this 
article, we shall not agree in our conclusions. 

Let us take the common meaning of labor. 
"Effort used to produce anything useful"; the 
thing may be used to feed, shelter, or amuse us; the 
effort may be pleasant, like the work of a carver on 
his beautiful design, or irksome, like the work of a 
feeder to a machine; but if it produces something 
that is of use to some one, it is labor. 

The part of this produce that remains in tangible 
form we call wealth, for wealth, you know, is only 
valuable labor product and not merely money or 
bonds; indeed, money and bonds usually mean only 
the power to take wealth from others. Mr. Wana- 
maker is wealthy, if all the contents of his stores are 



39° Socialism and Single Tax 

paid for, even if he should not have securities or 
money in the bank or cash in his office. He would 
still have wealth used as capital. So we may take 
the usual meaning of capital also, "that part of 
wealth used to produce more wealth." 

The housesmith who owns his hammer is, to that 
extent, a capitalist ; if he owns a pile driver he is a 
larger capitalist; and if he owns a trip hammer or a 
steel plant he is only a yet larger capitalist. 

Capital may be used by the owner himself, or 
used to help the labor of others, or to oppress others, 
but that does not make it the less capital any more 
than to chew a cigar or to use it to blow up a barrel 
of gunpowder makes it less a cigar. 

Interest goes to capital as its reward. Wages 
ought to go to labor as its reward. The laborer 
wants more return for his labor. The capitalist 
wants more return for his capital, as interest. 

Methods of Increasing Wages. — The prob- 
lem then really is how to raise wages of labor and 
of capital. For wages are only that part of the 
thing produced that goes to the producer of it. 
Neither labor nor capital will object to the other 
having an increased return, provided the increase 
is not at his expense. In fact, Mr. George Gunton 
publishes a magazine devoted to a plan for in- 
creasing wages by "raising the standard of living." 
He wants to increase the wants of the coal miners 
by teaching them to smoke cigars instead of pig-tail 
plug, and to give up beer in favor of champagne. 
That the professor thinks that the hole produces the 
mouse, instead of the mouse producing the hole, 



Bolton Hall 391 

makes no difference in his good intent. The fact is 
that when men get high wages, they will learn to 
buy luxuries "all by their little selves," without a 
professor of social economics to teach them. Nat- 
urally, both capital and labor are desirous of increas- 
ing their own wages, and there are few laborers who 
are not capitalists in some small way, and there are 
few capitalists that do no labor whatever; so that 
it would be to their interest to increase all wages. 

Every one recognizes that it is competition that 
regulates wages. For where capital finds abundant 
opportunities, as in a new country, interest rises, and 
where these opportunities are taken up interest falls; 
where two men seek one job wages will fall ; where 
two jobs seek one man wages will rise. Hence our 
laws against immigration and the plans of Mrs. 
Besant and others for the prevention of births. 

But we may lessen competition either by decreas- 
ing the supply of labor and of capital or by allowing 
the demand for labor and capital to increase. 

For instance, every year a few men meet in a di- 
rectors' room and decide how many tons of coal 
shall be mined in the coming year. Their actuary 
figures what the probable demand will be, and how 
much coal should be mined to bring say a hundred 
per cent, profit. To do this they put certain mines 
on short hours and keep certain coal fields idle. 
The result is that the laborers, pickers, machinists, 
weighers, engineers, superintendents, and carriers 
who would be employed in getting out that coal 
are out of jobs, and the clerks, salesmen, and 
lawyers and those who serve them, who would all 



39 2 Socialism and Single Tax 

be employed in getting coal to the consumer, are 
also "out of a job," and crowd the labor market, 
bidding for your job and for my clients. The de- 
mand for capital also falls. But those coal mines 
and fields might be opened up, increasing the de- 
mand for labor and capital instead of being shut 
down and decreasing it, as now. To shut them de- 
creases the opportunity of labor and cuts the wages 
of the capitalists who shut them as well as those of 
the laborer. 

Emerson says that whoever puts a chain about the 
neck of his fellow fastens the other end about his 
own neck; for we are of one flesh, and nothing is 
more clear than that no one can in the end really 
profit by injustice. 

Other methods of increasing wages are often pro- 
posed by those who wish to reform things without 
altering them. One is to encourage the laborer to 
demand high wages. This may sometimes help. 
Men often work for less than they could get because 
they and their fellows are content with what they do 
get. But the pressure of competition is a constant 
and steady force which, in the end, compels econo- 
mies and forces the average laborer down to just 
what he can live upon — with some approach to the 
way that he has been accustomed to live. 

Mayor "Golden Rule " Jones advocates the plan 
of shorter hours. He says, "Divide up the day." 
This is a palliative, like the short rations of ship- 
wrecked sailors. It assumes either that the amount 
of wages is a fixed amount, which it is not, for the 
laborer creates that which is sold to pay his wages; 



Bolton Hall 393 

or else it assumes that the amount of work to be 
done must be as limited as it is now. This is not so 
either, for no man should be out of work until all 
human wants are supplied. 

Elbert Hubbard represents the teachings of the 
kindly co-operative school. The fault in this is that 
the owners of the land that must furnish the ma- 
terials and the place for work are able to take all the 
increased product of co-operation in rent or price for 
the land. 

Others advocate farm colonies, like the Salvation 
Army's, or the purchase of land by the laborers. 
These are good so far as they go. If the money spent 
on strikes had been devoted to the purchase of land 
no one would be out of a job except the landless men. 

There is a little story about one John, who struck 
for $3 a day. The boss said that he could not 
afford it, and John went out. The boss reasoned 
that John had his home in the village and that there 
was no other factory there. So he said to himself: 
"When John gets tired of idleness and want he will 
come after me." But John did not come. After a 
while business brisked up and the boss went after 
John. Said he, "I '11 give you that $3, John." So 
John came back. 

The first day the boss came to John's bench: 
"What have you been doing these five months?" 
"I 've been working, sir." "Working at what?" 
"At my wood lot," says John. "Oh ! " replied the 
boss ; " I did not know you had a lot. " " No ? " says 
John; "I knew it all the time." 

The experience of the "Cultivation of Vacant 



394 Socialism and Single Tax 

Lots by the Unemployed " (a report of which the 
Philadelphia Association will send to any one who 
writes for it) shows that the distribution of land is 
the best palliative of which we know. 

Efforts to raise wages by strikes are popular with 
working men, because to strike is to do something 
immediate. Notwithstanding the persistent as- 
sertion of the paid press much has been gained 
by strikes and little lost to the working man as a 
whole. The workers, as a whole, did not lose wages 
by the steel strike. If every one in any trade were 
employed a strike would mean loss to that trade, 
but every one never is, and though the strike checks 
building and other use of steel, and may possibly 
induce some to use stone or wood instead, the stone 
masons and carpenters will get more work for it and 
there will not be less buildings in two years from 
now on account of the strike. 

Population and business grow, and a little later 
more men will be employed to put up the buildings 
that are halted now. A strike generally merely de- 
fers operations and wages. But the difficulty in a 
strike is that capital thereby idles and rusts, while 
labor, without other resources, starves. 

Edward McHugh's "ca-canny" method, which 
works so well with the English dock laborers, has not 
been tried here. It is applicable, however, only to 
day's labor, for it consists of doing only a dollar's 
worth of work for a dollar — not to strike, but to take 
the employer's pay, and by general agreement for 
the men to "take it easy" till the employer pays 
them to do their best. 



Bolton Hall 395 

Socialism is ardently and ably advocated as a 
remedy for the struggle for returns that goes on 
between labor and capital. That has been dis- 
cussed by others, so that it is enough to say that, 
unless it be voluntary socialism and include all the 
people voluntarily, it would degenerate into a 
tyranny, such as is described by Bellamy, where 
those who objected to its decrees, or were incapable 
of systematic work, were to be put into lunatic 
asylums or banished to waste lands. 

SINGLE Tax. — There remains the restoration of 
the land to the laborer. The simplest and natural 
way of doing this is by the taxation of land values. 
Single tax means one tax, to be levied on the value 
of land independent of improvements. In other 
words, the public appropriation of ground rent for 
all the needs of government, and' the abolition of 
all other taxes. 

This natural taxation will at once make the land 
accessible to all on equal terms, eliminate every form 
of monopoly, and restore equal rights to all without 
destroying private enterprise. 

Land titles will remain and land be bought and 
sold under the single tax regime just as at present. 
Each will be his own judge of the amount of land he 
shall hold. He will pay into the public treasury, in 
the form of a tax, the full ground rental, whether he 
holds his land idle, or puts it to its best use. This 
will make it to every man's interest not to grab 
more land than he can profitably use. There will 
then be land enough available for whoever wants it. 
The owners of valuable land will then find it to their 



39 6 Socialism and Single Tax 

interest either to put it to use themselves, or let it 
go to those who will use it. Millions and millions 
of acres, at our very doors, will then be available for 
any one to use, and acquire. And we may then 
again extend a welcome to the oppressed of other 
shores without fear of their cutting down our wages 
by their competition. 

Any one can get for fifteen cents The Land Ques- 
tion, by Henry George, or Shortest Road to the 
Single Tax, for ten cents, so I will speak only of the 
object and the effort of land restoration in relation 
to wages. 

Wages are drawn by labor from the land. Every- 
thing we wear or use is drawn from the land. This 
paper and the ink and the press it was printed on 
come from the wood and the carbon and the iron in 
the land. Mr. Morgan, Mr. Carnegie, Mr. Hanna, 
and Mr. Rockefeller do not ''give us work." They 
did not come into the world with a supply of work. 
All that they do is to get out of the way to some 
extent and let men get at the land to work. At the 
most they help to organize men, or to pay some to 
organize the rest, the better to work. But the 
monopolies that they sustain, and that sustain them, 
keep men from work. 

Abolition of Monopolies.— Monopolies are 
mainly of four kinds. Patent, tariff, money, and 
land monopolies. These enable a few persons to 
take the product of the work of others and to shut 
off from men the opportunities to employ them- 
selves and one another and to employ capital. 
This intensifies the natural, healthy competition, 



Bolton Hall 397 

and enables the monopolies, as Karl Marx shows 
in the last chapters of Das Kapital, to "exploit 
labor," to exact from the producer the great bulk 
of what he makes. They force men to bid against 
one another for a chance to work. 

Now, we single taxers propose to sweep away all 
these monopolies by simply repealing, one by one, 
the laws which create monopolies. We would re- 
peal such patent laws as enable some to keep inven- 
tions unused or partly used. We would repeal the 
tariff laws which prevent men from getting for as 
little as possible what they want, and we would 
supply the deficit by means of increased taxes upon 
the site value of land. We would destroy the re- 
strictive financial laws, the special privilege of free 
coinage to the holders of gold, the monopoly of issue 
of currency conferred on national banks by the ten- 
per-cent. "State Bank tax" and by the issue of 
notes against bond deposits, and, lastly, by making 
it unprofitable to hold land idle or only partly used, 
we would open to all the boundless opportunities 
of employment offered by the land and all that it 
produces and contains. For there are wants enough 
to be supplied and there is land enough to supply 
them all. Our one State of Texas would hold all 
the people of the United States and leave all the 
other States vacant, and still Texas would be less 
"crowded" than Holland is. 

All the objections that can be raised to this simple 
plan are answered in Louis F. Post's pamphlet, The 
Single Tax. We will not repeat them here. No 
one can be converted to the single tax by reading an 



39 8 Socialism and Single Tax 

article. No one can convert you but yourself; but 
none of us can see truth unless we look; aye, look 
and study and think. 

It is true that when monopoly is abolished what 
we call the "capitalist " will disappear, for all men 
will be capitalists. But we have seen that although 
at present the interests of labor are opposed to the 
apparent interests of the class that holds practically 
all the capital, this is not a natural condition. It is 
like the antagonism that exists between rats in a 
cage where sufficent food for all cannot be had. 

We have seen that at present labor's interests are 
the same as those of capital—namely, to destroy 
monopoly. For monopoly is the enemy of both, be- 
cause it keeps both out of employment and presses 
down the returns to both. 

You are interested perhaps in the discussion of 
this struggle because the outcome of the struggle 
will mean plenty or want to you. But that is not 
the most important thing. It makes very little dif- 
ference to the world whether you fatten or starve. 
But it makes every difference to the world whether 
or not you are able to do right in the world ; whether 
it is really possible for men to love their brethren. 

At present we live under conditions that compel 
every one of us, rich and poor, to trample upon our 
fellows in order to maintain our place. We are try- 
ing to take away his clients, his trade, his very place, 
or he is trying to take ours away. We wage the 
civil war of commerce that compels us to prey on 
one another. That is not the will of our common 
Father — that in order to do our duty and feed our 



Bolton Hall 399 

children we should take the bread out of other chil- 
dren's mouths. No, having given the earth to 
"bring forth abundantly to satisfy the desire of 
every living thing," He never meant that we should 
kill one another, shoot one another down, quarrelling 
over a wages' scale. 

The right adjustment of this matter is in our own 
control. If we will do justice now, social justice 
now, we will be able for the first time to follow 
righteousness, and instead of striving merely to live, 
we will live in happy helpfulness of the world. But 
if we will not, our blood is upon our heads, and 
upon our children's heads, for "Whatsoever a man 
soweth, that shall he also reap." 



SOCIALISM AND SINGLE TAX 

Fair Play 1 

by ernest howard crosby 

CAPITAL and labor are at war. There can be 
no question about it. Pick up the morning's 
paper almost any day of the week and you find ac- 
counts of strikes and lockouts and trade disputes. 
''Let us have peace," all good people are crying, but 
there is no peace, and we do not seem to know how 
to secure it. 

There are several kinds of peace. There is the 
peace that prevailed at Warsaw, a peace founded on 
massacre and outrage, and itself the foundation of 
despotism and oppression. That is not the kind of 
peace that we long for. There is a peace that means 
life and a peace that means death, and we want 
the former. It must be a peace growing out of an 
honest attempt to establish justice, and containing 

1 Editor's Note. — This article has been included under the divis- 
ion Socialism and Single Tax as on the whole the most applicable, with- 
out making a division for it only. The original paper was written in 
the heat of the great steel strike, just at the time when the corpora- 
tion ordered the removal of the McKeesport mills. In revising his 
paper for permanent publication, the author has retained the refer- 
ence to that incident as an illustration generally applicable. 

400 



Ernest Howard Crosby 40 l 

the germs of a continuous growth toward the ideal 
of absolute justice. We want nothing less than 
that. 

Unequal Distribution of Profits. — But first 
of all we must know what the war is about. If 
you had been alive one hundred and fifty years 
ago, and some prophet had told you that in the 
year 1901 one man could by means of machinery 
do the work of thirteen — striking an average for all 
trades and industries — what would you have said? 
Would you not have exclaimed : "Why then people 
will only have to work one thirteenth as much as 
they do now, and with two or three hours' work a 
day they will have all the luxuries imaginable." 
Well, it is a fact. To-day one man can do as much 
as thirteen could in 1750. The wealth of the world 
has increased enormously. In this country especially 
it is increasing by leaps and bounds, and yet no less 
an authority than John Stuart Mill said twenty 
years ago that it was doubtful if machinery had 
lightened the toil of a single workman. This is per- 
haps an exaggeration. A man who has employment 
now usually gets somewhat better pay and works 
somewhat shorter hours than he did a century and a 
half ago ; his scale of living is somewhat higher — but 
the advance he has made bears no comparison what- 
ever with the ratio of one to thirteen, nor to the 
immense increase in wealth of the community. 

Where has this new machine-made wealth gone? 
Look around you and see. One per cent, of the 
families in this country own more than half of the 
wealth. There are several thousands of millionaires 

a6 



402 Socialism and Single Tax 

in New York City alone. Forty years ago there 
were hardly a dozen in the country. There were no 
tramps in those days either, and very little talk of 
the unemployed. Now we have a steadily growing 
army of tramps, and they are beginning to write 
books about them, and the unemployed is always 
with us. When scarlet fever or diphtheria breaks 
out in a town there is always a good deal of conster- 
nation. Placards are put on houses, families are 
quarantined, and mothers worry over their children. 
A tramp, or a man seeking work in vain, is a symp- 
tom of a far worse disease than these, and ought to 
cause as much more of a fright. They are studying 
the malaria plasmodium on Staten Island and dis- 
secting the anaphele mosquito that carries the con- 
tagion. They propose to exterminate this pest by 
applications of Standard Oil, but they have not yet 
tackled the Standard Oil disease itself. 

The gist, then, of the complaint of the wage- 
earners— whether they know it or not — is that they 
do not receive a fair share of the wealth which they 
help to produce, and the glance which we have 
taken at the situation would seem to indicate that 
there is some justice in their complaint. I have seen 
the statement quoted from Mr. Carroll Wright, the 
national Commissioner of Labor, (whether accurately 
or not, I do not know,) that the average rate of wages 
per year paid in this country is $347, and the aver- 
age product of each laborer is valued at $1888. 

Machinery and Workmen. — Besides this 
anomaly we must remember that there were about 
one million men who could not obtain employment 



Ernest Howard Crosby 4°3 

during the depression of 1882 to 1885, an< 3 a large 
number in 1893-94. If there were signs of steady 
improvement we might make light of these figures, 
but the general tendency (except for temporary 
reactions) is downward. Machinery is becoming 
more perfect every day, more and more men are 
thrown out of work in consequence ; where human be- 
ings are still needed women and boys are supplanting 
the men, and when "hard times " come again there 
will undoubtedly be more unemployed than ever. 

I visited a mill some time ago which exemplified 
the progress of industry in a striking way. In it 
they manufactured cheap socks for working men. 
There were four hundred machines, and each ma- 
chine made a complete sock by itself in five minutes. 
It began at the ankle, making the sock of blue 
thread. At the heel it substituted white thread, 
and again at the toe. Then it cut the thread, laid 
the sock down, and commenced on another. There 
was nobody near the machine during the operation. 
In fact, when I came into the room, which contained 
one hundred similar machines, I saw no one at all. 

Finally, in the distance I saw the head of a small 
boy, and then another. There were five boys in the 
room, and each watched twenty machines (a bright 
boy can watch twenty-five), and all they had to do 
was to oil and clean them, supply new thread when 
the great spools were exhausted, and report any 
break in the machinery. In this factory fifty boys 
(there were several shifts) turned out five thousand 
dozen pairs of socks a day, or as much as fifty thou- 
sand people could have done one hundred and fifty 



404 Socialism and Single Tax 

years ago ! Each boy did the work of one thousand 
people. 

Now the peculiar thing about such factories is 
that they employ so few persons, and only boys and 
girls at that. In this mill the only men were in the 
packing department. If this tendency goes on, what 
shall we do with our men? A workman of forty is 
superannuated. In such factories as the above he 
is. discharged at twenty or so. What shall we do 
with the men? We may have to hand them over to 
the street-cleaning department to be dumped out at 
sea off Coney Island. 

In another century a few hundred boys may be 
able to do all the work of New York, and there will 
be nothing human left except small boys and stock- 
holders. Meanwhile what shall. we do with our five 
thousand dozen pairs of workmen's socks every day, 
with no workmen to wear them, or — what amounts 
to the same thing — with no money to buy them? 
Is it not clear that we are getting into an industrial 
hole? We must find a market for the products 
which our unemployed cannot buy, and that is the 
reason why we are bagging the Philippines and Cuba 
and Porto Rico, and any old island that comes 
along. If you explore the jungles of Luzon a year 
hence I have no doubt you will see half-naked sav- 
ages gliding among the trees wearing blue socks 
with white toes and heels. 

But the supply of the isles of the sea is not inex- 
haustible, and a good many manufacturing nations 
are " laying for" them. New markets will only 
postpone the evil day, and no one knows this better 



Ernest Howard Crosby 405 

than our great captains of finance, who by means 
of trust and combinations are attempting to ward 
off the crisis. This is a foolish policy. We had 
better recognize the fact that we are industrially ill 
and seek to find out the cause and the remedy. Is 
capitalism sick unto death? And if so, why? And 
what can cure it or take its place? 

State Socialism. — The state socialist has a 
ready answer. He says that these difficulties of 
overproduction and lack of employment are the 
natural results of competition, and that the only 
way out is for the people to take over the land and 
ail means of production and organize the indus- 
tries of the country from Washington. This solu- 
tion is called "scientific," and it seems very simple; 
but I must confess that the idea of it "gives me 
pause." There is a Teutonic love of government 
implied in the suggestion which seems to me un- 
likely to attract any large portion of the American 
people, and I do not anticipate the adoption of any 
such programme, unless the industrial chiefs of the 
country by their refusal to give up their privileges 
bring it upon us as a punishment for our sins. 

If multi-millionaries and tramps, bribe-taking leg- 
islators and party bosses, the Stock Exchange and 
Tammany Hall are the natural result of ordinary 
business competition, the state socialists may be 
right and it may become necessary for the people to 
absorb and organize politically the productive ener- 
gies of the land, although it is a task which might 
make a giant stagger; but I doubt their major 
premise. America is supposed to be a free country, 



406 Socialism and Single Tax 

but we have not given freedom a fair trial in indus- 
trial matters, and until we do I shall not be satisfied 
that nature cannot cure evils for which monopoly of 
one kind or other is responsible. 

Monopolies.— A glance at the great fortunes 
built up during the past half-century will show the 
character of the monopolies which entered into the 
formation of them. In almost every case there is an 
artificial monopoly of some kind created by law. 
Take the two greatest fortunes in New York. Is it 
possible to limit the share which the protective tariff 
had in storing up those millions which are now over- 
flowing into libraries, big and little — a tariff which 
enables the manufacturer to sell his products cheaper 
abroad than at home, a law deliberately passed by 
supposedly sane people to force themselves to pay 
more for a native article than foreigners have to pay 
for it? The other great fortune came from petroleum. 
An excellent history of its rise has been written by 
Henry D. Lloyd, in his book, Wealth against Com- 
monwealth, published by the Harpers. This busi- 
ness was built up by the unscrupulous manipulation 
of railway freights so that competition became im- 
possible. Its founders made contracts by which 
their oil was carried practically for nothing and their 
rivals were charged extravagant prices and cars were 
refused them when there were plenty to be had. 
Here, again, we have a fortune created by bad laws, 
for our laws authorized the building of these rail- 
ways over land seized by the right of eminent do- 
main of the State without assuring equal freights 
and privileges to all citizens. 



Ernest Howard Crosby 4°7 

Another kind of monopoly created by law is that 
of the gas, trolley, and other companies that use the 
streets. The number of such franchises possible in 
a given street is necessarily limited, and hence arises 
a natural monopoly, which can only be avoided by 
municipal ownership or by operation by private 
companies instituted like our colleges and univer- 
sities, without stockholders and dividends. As it is, 
these companies levy what tribute they please al- 
most without check, and some of the greatest 
accumulations of wealth are due to them. The 
Metropolitan Railway Company alone 4ias at least 
$80,000,000 of watered stock — a gift from the peo- 
ple, and nothing else. "Water" is a pretty word, 
suggestive of purity and health; but the only water 
in watered stock is the sweat of other people's 
brows. You cannot get money without earning it 
unless some one else earns it without getting it. 

There are also patent monopolies — as in the case 
of the Telephone Trust, whose life has been pro- 
longed by some strange hocus pocus at Washing- 
ton ; and the internal revenue monopoly of the 
brewers, and the banking monopoly; but the only 
other one worth dwelling on here is the most funda- 
mental of all — the land monopoly, including the 
natural resources of the earth, its coal and oil and 
iron and silver and gold. This monopoly enters 
into almost all great accumulations of wealth and 
represents a vast amount of unearned wealth. John 
Stuart Mill first called attention to the unearned in- 
crement — the increase in value of land due to the 
community and which goes into private pockets. 



408 Socialism and Single Tax 

Henry George showed how, by his single tax, this 
loss could be saved to the people and equality of 
rights in land introduced. Land is a gift of nature, 
like light and air, and every man should have the 
same right to it as every other. 

I hope that when Tesla gets into communication 
with Mars he will ask the inhabitants if nine tenths 
of them pay rent to the other tenth for the privilege 
of remaining on the surface of the planet. 

A Warning. — And now a friendly word to our 
great financiers and trust magnates. 

If you do not want state socialism adopted by 
the people — disastrous to your plans if it succeeds 
and disastrous to everybody if it fails — you must 
loosen your hold on your unjust privileges. You 
must consent to drop the protective tariff; you must 
grant equal rates to all on the railway, as the post- 
office does; you must squeeze the water out of your 
stocks, and you must take up seriously the question 
of unearned increment in land, as they are beginning 
to do in England and some of her colonies. This is 
the only alternative open to you, unless you take 
the motto, "After us, the deluge." 

But you are doing just the opposite of all this. 
You are insisting on increasing your privileges; you 
are bringing all your accumulations together into 
one; you are passing around the hat for preposter- 
ous ship subsidies and all sorts of new franchises, 
and you are becoming so powerful and using your 
power so arbitrarily that no self-respecting people 
will long submit to it. 

We read to-day that the steel trust has ordered 



Ernest Howard Crosby 409 

the demolition of the great works on which the life 
of the city of McKeesport depends, because the 
mayor expressed his sympathy and that of the citi- 
zens with the strikers there. The Czar has no such 
power as this, and would not dare to use it if he 
had. Those whom the gods would destroy they 
first make mad. 

Freedom of Opportunities. — It is clear that 
we have never really tried freedom. We have no 
free trade, no free land, and our highways are in- 
fested by corporate brigands who hold us up and 
make us pay dividends on watered stock when we 
wish to use them. Is it not likely that if freedom 
and equality prevailed in these respects, the labor 
market would automatically adjust itself and that 
the great benefits secured through machinery would 
distribute themselves among all classes of the com- 
munity? If a man walks lame and has fetters on his 
arms and legs, which is the better way to try to cure 
him, — to construct a complicated wheeled chair for 
him, which may never work at all, and then haul 
him about with his fetters on, or to knock off his 
fetters? Common-sense says: "Knock off his fetters, 
and then if he turns out to be permanently lame it 
will be time enough to get a chair for him." 

What would be likely to happen if we had free 
trade, free land, free banking, and equal opportuni- 
ties for all, as we might easily have if our affairs 
were not managed by greed? The maldistribution 
of the profits of labor is effected in three ways — 
through rent, interest, and profit. The single tax 
would apply rent (that is, ground rent or economic 



4-io Socialism and Single Tax 

rent — the unearned increment of Mill) to the bene- 
fit of all. Free banking would tend to reduce in- 
terest to the actual cost of banking operation, and 
free trade would tend to reduce profits to the actual 
cost of commercial operations, and each kind of free- 
dom would help each other kind. In this way the 
channels by which the just share of labor in its prod- 
ucts escapes would be stopped up, and every man 
would get the product of his labor, whether it be 
manual or mental. No wage-earner that I have ever 
met objects to the payment in full of the value of 
management and superintendence. If a captain of 
industry's services are worth $50,000 a year, let him 
have it, but under just and free conditions it is not 
likely that any man's services would be worth so 
much. It is because of the war of unnatural com- 
petition produced by the artificial scarcity of oppor- 
tunities for labor, springing in its turn from the 
monopolies of land, trade, etc., to which we have re- 
ferred, that great generalship seems necessary in our 
industries. In a time of commercial peace and good- 
will the task of superintendence would be simple — 
it would be simply to serve the public and not to 
get ahead of competitors. 

Yes, it is the monopoly of opportunities that 
makes the war between capital and labor so acute. 
All the natural resources of the country — the land, 
the coal, the oil, the iron — are locked up in some 
strong box or other, and if the workman loses his 
job he sees nothing but starvation before him, and 
this often makes him desperate. With equal oppor- 
tunities for all there would be nothing to be feared 



Ernest Howard Crosby 4 11 

in case of discharge, for the demand for labor would 
be steady and the workman would confer as much 
of a favor by accepting employment as the employer 
in offering it. Employer and employee would see 
that they were mutually necessary to each other, 
and they would esteem each other as friends. It is 
only when each party occupies such a point of equal 
vantage that the war between capital and labor will 
cease, for neither side will be able to oppress the 
other. 

Meanwhile the war goes on. Capital and labor, 
which ought to be allies and friends, are at swords' 
points. How is the warfare to be conducted? It is 
hardly necessary to urge forbearance upon both 
sides, for the unreasonable pressing of an advantage 
on either side in the end does harm to that side. If 
the mills are moved from McKeesport it will be a 
serious blow to capital. If the strikers have recourse 
to violence, it will injure them most and influence 
public opinion against them. The public, in so far 
as it is a disinterested spectator, does not want 
tyranny of any kind, either from the trusts or the 
trade-unions, but just at present it is so much 
more in danger of a capitalistic oligarchy than 
from trade-union dictatorship that its interests are 
pretty clearly on the side of the under dog. Trade- 
unionism is a most valuable counterpoise to the des- 
potism of monopoly. More than that, it is a great 
educational force among the wage-earners, and 
within its limits it inculcates comradeship and 
brotherhood. It is teaching the people voluntary 
co-operation of a kind, and perhaps some day it may 



4 12 Socialism and Single Tax 

develop into a self-organizing democratic indepen- 
dent system of production, although it is not yet 
ripe for this. From every point of view it is to the 
interest of the public that trade-unionism should 
thrive and improve, and to this end it needs the 
support of public opinion and must earn it by its 
wisdom and forbearance. 

The fundamental justice of the wage-earner's case 
— the importance of according him his just dues — 
is forcibly borne out by the religion which most of us 
profess. Christianity sprang from the Jewish church, 
and the Jewish church had its origin in a strike — the 
strike of the Hebrew brickmakers in Egypt — and 
Moses and Aaron were the first walking delegates on 
record. The longest of the Ten Commandments 
was a labor law, fixing a six-day working week in 
complete analogy with our eight-hour statutes. The 
law of Moses endeavored to secure to every citizen 
an equal right in the land. The prophets, many of 
them, were agitators for the rights of the poor, and 
in the New Testament we find working men — car- 
penters and fishermen — establishing Christianity on 
a basis of doing unto others as you would have them 
do to you. Every teacher of Christianity should be 
enlisted in the cause of labor and of industrial 
peace, and fortunately not a few of them are. 

But our political faith as well as our religion sets 
up the standard of equal rights and equal oppor- 
tunities. The Declaration of Independence is going 
out of fashion in our foreign dependencies, but we 
should at least keep it for home consumption. The 
equal right to life, liberty, and the pursuit of happi- 



Ernest Howard Crosby 4 r 3 

ness can hardly be said to exist in a land of slums 
and palaces, of child labor and unemployed and un- 
exampled luxury. To accept the present divided 
condition of our society as a finality is to be untrue, 
not only to our Christianity, but to our democracy. 
Our political democracy is nothing but a mask be- 
hind which our industrial oligarchy hardly tries to 
hide itself. The real power has passed from our 
state-houses and city halls, and is now centred in 
the counting-room and chamber of commerce. Un- 
less we can democratize these our constitutions have 
become useless trappings, and we may as well admit 
that they give us no more assurance of freedom than 
did their senates and consulships to the subjects of 
the Caesars. And the first step toward the democra- 
tization of business is the abolition of the unjust 
privileges which it enjoys and a free and frank recog- 
nition of the ills which the wage-earner suffers in 
consequence. 

But even to those who turn a deaf ear to the plea 
of religion and democracy we can appeal with equal 
force in the name of fair play. Every man worthy 
the name must respond to that appeal. You would 
not cheat at cards or sell out a horse race or refuse an 
equal chance to a rival in an athletic contest. Can 
you then consent to play the game of life with 
loaded dice or insist on every handicap that. wealth 
and chance have given you? Is it fair to match your 
steam yacht against my leaky scow — your thorough- 
bred against my broken-down nag? A fair field and 
no favor, this is all that men need for the present, 
at any rate. The field is not fair and the favors are 



4 r 4 Socialism and Single Tax 

sold over the counter at Washington and Albany. 
Until there is a general willingness to accord fair 
play in the relations of life the war between capital 
and labor will continue. Its evils may be mitigated 
and its excesses limited, but it will still be waged. 
When fair play becomes the watchword of trust as 
well as of trade-union, then, at last, we may expect 
an enduring industrial peace. 



PART VII 

THE UNEMPLOYED 

a. Is Permanent Work with Comfortable Living 

Wage Possible for All in this Country ? 

b. How may Work and Workers be Brought 

Together ? 



415 



THE UNEMPLOYED 

SYNOPSIS 

Wheeler. Interdependence of employer and employed — Unde- 
veloped resources — New Zealand methods — Inapplicable 
because of American individualism — Need of municipal col- 
lectivism — Individual and associated philanthropic effort — Small 
farm allotments — Increase of demand by wise industrial 
methods. 

Rns. Interests of employer and employed mutual — Permanent 
work possible — Failure to connect — Public employment unde- 
sirable — State labor bureau — Need of expanding its working — 
Make the country attractive — Educate men ; make them think ; 
make them self-dependent — Home — School — Play. 



417 



THE UNEMPLOYED 

Education of the Worker 
by everett p. wheeler 

THE interests of employers and employed are 
mutual, because each has something that the 
other needs. Indeed, in a very true sense, every 
person engaged in active occupation is an employer. 
The man who buys a loaf of bread employs the 
farmer who raises the grain, the miller who grinds, 
and the baker who bakes it. The success of the 
harvest depends on the combined activity of the 
owner of the farm, the sower, and the reaper. Each 
is dependent on the other. 

To come more closely to our subject and deal with 
manufacturing industries, it becomes, on reflection, 
plain that the success of the mill owner depends on 
the skill and diligence of the workmen. On the 
other hand, workmen will be well paid and get 
steady work only when the mills are well built, pro- 
vided with the best machinery, and efficiently man- 
aged. It is not only in war that the blood of the 
soldier pays for the blunder of the general. 

Booker Washington, in his very interesting book, 
Up from Slavery, points out how this mutuality of 
interest can be made effective : 

419 



420 The Unemployed 

" Few things help an individual more than to place re- 
sponsibility upon him and let him know that you trust 
him. When I have read of labor troubles between em- 
ployers and employed, I have often thought that many 
strikes and similar disturbances might be avoided if the 
employers would cultivate the habit of getting nearer to 
their employees, of consulting and advising with them 
and letting them feel that the interests of the two are 
the same." 

And now to come to the question to which you 
have especially asked my attention. 

Permanent work, with comfortable living wage, 
is, in my opinion, possible for all in this country. 
England, France, and Germany are tenfold more 
thickly settled than this country, and yet their peo- 
ple earn a comfortable living. Our resources are far 
from being developed. Even within a hundred miles 
of New York are thousands of acres of wild land. 
Manufacturing and agriculture have naturally seized 
upon the most attractive spots. But many more re- 
main, and are equally capable of development. 
When benevolent people in great cities bemoan the 
burden of unskilled and unemployed workmen they 
are on the threshold of the question. To see the 
difficulty is always the first step to provide work for 
these people and bring them to it. But it is only 
the first step. 

The next step will be to provide more intelligent 
and efficient organization for the purpose, which 
must aim at permanent results. In New Zealand the 
State undertakes this organization and manages it 
well. This it does by laying out its system of pub- 



Everett P. Wheeler \2\ 

lie works in such a way that not only immediate 
necessities but future requirements are provided for. 
If New York City, for example, were managed on 
New Zealand principles, we should reclaim some of 
the marshes in the neighborhood of the city and fill 
them in with the thousands of tons of ashes that we 
now wastefully and stupidly dump into the sea. The 
land so reclaimed we should sell in small plots on 
easy terms to city workmen. How this is done in 
New Zealand may be read with more detail in 
Henry Lloyd's Newest England. 

In this country the State is not ready to under- 
take such a task, and that for several reasons: 

i. The American characteristic is individualism. 
This is written on every page of colonial history and 
is just as marked to-day. We are gradually learning 
that some things can be done better by collectivism. 
The water supply and the docks of cities are being 
taken out of private hands. The best canals in the 
country have been built by the United States Gov- 
ernment. The subway in Boston, the electric un- 
derground railway in New York, belong to these 
cities. No railway has been better operated than 
the cable railway on the Brooklyn Bridge has been 
by the two cities now united into one. Thus we 
are gradually being prepared for further steps in the 
same direction. But before any advance the suc- 
cessful individual, conscious of his strength and 
skill, cries out against any further collective prog- 
ress. Part of the evolution of the life of a nation is 
education by experience, and for this we must have 
patience. The successful energetic individual is also 



4 22 The Unemployed 

a voter, and he, too, must be convinced by the ex- 
perience of the nation. 

2. This very individualism in its bad form is too 
often carried into public business. The official is 
not in it "for his health," to use his own slang, and 
often uses the power of his office to promote some 
individual interest. When this is done to promote 
party success it is often thought to be meritorious. 
Even there, however, it lowers the standard of 
official duty. But when for personal gain the pub- 
lic servant oppresses even malefactors, or extorts 
money for the lease or sale of public franchises, he 
commits the gravest of official crimes. Until this 
vicious system of favoritism, bribery, and blackmail 
is broken up, New York cannot hope to do more 
than it now does in the line of government activity. 
All who desire the latter should set themselves vig- 
orously to work to overturn the former. 1 

3. Individual and associated philanthropic effort 
is doing much to bring work and workmen together. 
The Baron de Hirsch Fund, the small farm allot- 
ments under the auspices of Tuskegee and similar 
institutions in the South, the Salvation Army colo- 
nies, and, on a smaller scale, employment offices in 
the large cities, already confer mutual benefits on 
employers and employed. There is no patent de- 
vice to accomplish this result. To achieve it on as 
large a scale as in New Zealand is quite within the 
reach of several men in the United States whose in- 

1 Editor's Note. — Written during the Fusion campaign against 
Tammany Hall. In revising the paper for permanent publication 
the author has preferred to let the original reference stand. 



Everett P. Wheeler 4 2 3 

dividual wealth is nearly, if not quite, as great as 
that of the whole population of New Zealand. In 
these undertakings it is essential not to overlook 
the fact that the welfare of the unskilled and com- 
paratively inefficient workman is a matter of im- 
portance to the public. To train him, to encourage 
him, and to give him work which he can do is what 
Hampton and Tuskegee are doing for the Southern 
blacks. There is ample opportunity for similar 
work in our Northern cities, and in the country, too. 
Farmers' sons are beginning to learn that it pays to 
go to an agricultural school. Laborers' sons are 
finding that trade schools are the place for boys. In 
the end the most effective way to bring work and 
workmen together is to teach the workman. For a 
really skilled and industrious workman need never 
be long out of work, even under existing conditions. 
There is in many breasts a lurking fear that it is 
possible to have too many skilled workmen, and that 
those who have skill promote their own interests by 
restricting their number. This overlooks the fact 
that the wants of man are limitless. The future 
welfare of the race, and therefore of the individuals 
who compose it, is to be promoted by the develop- 
ment of the individual. Every new home creates a 
demand for comforts that must be supplied by labor. 
Demand for labor is what increases wages. Perma- 
nent increase is dependent upon permanent demand. 
To make demand for labor permanent we must look 
to the supply of the wants of the many. When 
Henry H. Rogers took over the management of the 
vaseline patents he reduced the price to the lowest 



424 The Unemployed 

point consistent with any profit. In that way he 
created a general demand, which is constantly in- 
creasing. He added inexpressibly to the comfort of 
the people, increased greatly their demand for his 
product, and did not diminish the gain of his com- 
pany. Not all our rich men are as far-sighted as Mr. 
Rogers. But it is on our realizing the great truth 
which he acted upon, namely, that the real interests 
of producer and consumer are identical, that lasting 
progress must depend. 



THE UNEMPLOYED 
A Problem 

BY JACOB A. RIIS 

1WISH I could add something of value to your 
discussion. I know very little of economics. I 
sidetracked them purposely in order that I might do 
the simple thing that was mine to do, in the way I 
had in mind. Had How the Other Half Lives been 
written from the single-tax standpoint, for instance, 
— to me always an attractive one, — it would not have 
served the purpose I had for it. At least I don't 
think so. So I put it aside. Perhaps I was wrong; 
perhaps I was only lazy ; the fact is that I cut my- 
self off from thinking on those subjects so that the 
half that did n't know might get a view untinged by 
theories and a chance to think where it was needed. 
I believe — indeed, I know — that the interests of 
employer and employed are mutual, because if they 
were not, if the brotherhood were a mere figment of 
my brain and heart, or of yours, our Christian faith 
would be a lie, our republic a vain dream ; and I will 
not give up either. I know that "permanent work 
with a comfortable living wage is possible for all in 
this country," because if it were not, the country 

425 



426 The Unemployed 

must be already over-populated, and I know it is 
not. Yet no argument is needed to convince me that 
something has broken down. Out in the little 
suburb on Long Island where I live, well within the 
Greater New York, work goes often begging in my 
sight, while men and women starve for it in the 
tenement-house city. The trolley would take them 
to it for five cents. It excites no wonder but vast 
pity in me when I read that twenty thousand har- 
vesters are needed in Kansas. Any day New York 
City could turn up forty thousand men without 
work. How to bring them and the work together? 

Years ago, one spring, I wanted my house painted 
and could get no one to do it. It happened that 
v/hile I was vainly looking for a man, my duties as 
a police reporter led me to a West Side tenement, 
where a house painter had that day killed himself 
because he could get no work and had no means of 
providing for his family. He was not a drunkard, 
he was just discouraged. The coincidence was 
startling enough, but I let it go at that time. The 
next spring exactly the same thing happened. 
Again the work went begging at Richmond Hill, 
and in the city, eight miles away, a painter gave up 
the useless struggle. I wrote the facts then, and 
pointed out their obvious lesson. Some means was 
needed of bringing the man and the work together. 

I do not believe in public employment as a means 
of meeting unemployment. It is a form of charity 
which I believe to be vicious and bad — bad for the 
man and bad for the community; but there is no 
reason why the State might not help the man to 



Jacob A. Riis 4 2 7 

find the job that is looking for him. Rather, there 
is every reason why it should. This was the lesson 
I saw. We have established a State Labor Bureau 
since then, and it has done what it could. I have 
every reason to believe that it has done it as well as 
it could. But that it has met the emergency I sup- 
pose no one will pretend. Jobs still go begging on 
Long Island. Kansas clamors in vain. The city 
is full of the unemployed. Why is it? Partly, I 
fancy, because the scheme has never been carried 
out as it should have been. In my mind it in- 
cluded the closest, most constant and searching 
communication between all parts of the State, all 
communities in it, every trade-union, every head- 
quarters of any kind where men in search of work 
meet, an organization so expansive and persistent as 
to attract irresistibly employers and employees 
alike; so all-pervading that every policeman would 
know and at once refer the inquirer to the place 
where he would find what he wanted, if it was there. 
That done, I would want the same thing repeated 
in every State. 

Difficult job that, you say. True, but there is no 
question so difficult as this of unemployment; for, 
when all were done that I have spoken of, you 
would find it unanswered yet. I have gone more 
than once to men and women in the city and offered 
them the wages they would receive there, plus the 
fare to my town, but they would not come. It was 
so far, they said. I travelled the distance every day, 
•twice. It was not that they would have had to get 
up earlier, or come home later, for my offer was that 



428 The Unemployed 

they might travel in my time; but no, it made no 
difference. Of course, that is not true of all, but it 
is true of too many; it accounts for a much larger 
share of the trouble than we probably think. They 
will not leave the city, and since new hordes are 
ever pouring in, there must needs be a glut in the 
labor market. Of one hundred families, specially 
selected as fit and in need of the change, every in- 
ducement and help offered through the Baron de 
Hirsch Fund found, if I remember right, seven ready 
to go. It is an old and sad story enough; sad be- 
cause it means the loss of resources, sacrificed to the 
slum; of manliness, of independence, identity al- 
most. Only in its crowds are they happy. Its ex- 
citement, its brass bands, its rush and roar are their 
mental stimulants. They have forgotten to think; 
or they have unlearned it, and they cannot be happy 
in the "society of the stumps." 

I speak of New York, but it is so all over. The 
train upon which I came up north from Toronto 
carried a huge "excursion " of young Canadians, 
who were going into the great and prosperous North- 
west, where the harvest fields were waiting for them. 
They all had excursion tickets. There was no work 
for them where they came from, or they would not 
have taken the journey. Where they were going, 
it was waiting in abundance; yet they were coming 
back. Why? I asked several. The only intelligi- 
ble answer I got was that there was no fun out there. 
No doubt that is one answer to the question how to 
bring the work and the worker together and keep 
them together. 



Jacob A. Riis 4 2 9 

"The country" must be robbed of its chief terror, 
its lonesomeness. In the term is included long 
hours, hard work, no fun. In the Jewish colonies 
in Southern Jersey I found the complaint of New 
England echoing: "The boys would not stay on the 
farm." But one that was full of boys was an excep- 
tion. The boys not only stayed — they were buying 
land adjoining their father's and making it blossom 
like a garden. While I ate lunch in that house, I 
heard the sound of a piano. My host smiled his 
reply to my questioning look. Yes, he said ; the 
children wanted it and he let them have it ; let them 
take lessons, too, in winter at the next town, while 
the rest worked for a Philadelphia tailor to make 
it up between them. It paid. No doubt it did. 
That father was wise. More fun on the farm would 
help solve social questions not only here, but in the 
distant city as well. 

And still the bulk of the question how to bring 
the work that is waiting and the workers that need 
it together would be unanswered. If you were to- 
morrow, by some means of which I cannot think, to 
send thirty thousand seekers for work out of the city 
where there is none for them, it would simply be a 
signal for thirty thousand others to stream in to be 
in their turn rendered helpless by life in the crowd. 
Why do they come? Why is our young guide, born 
and brought up in the backwoods, stalwart and 
straight as one of his native pines, at this moment 
telling the doctor, my chum in camp, by the fire- 
place, where I can hear him, of his plans to seek the 
city and his fortune this winter, and asking his ad- 



43° The Unemployed 

vice? The doctor tells him to stay where he is well 
off, earning fifty dollars a month and found in the 
winter logging camps, and a guide's wages in sum- 
mer. He knows, I know, Aleck knows, that he will 
not heed the advice. He will go, and may luck go 
with him. May I never find him on my list of the 
unemployed. 

But why does he go? He goes, following a hu- 
man impulse, seeking the crowd, taking his chances. 
And he will not take time to think. 

How are the workers and the work to be brought 
together, with this unceasing rush apart? I tell you 
I don't know. 

We can only patch and mend and hope that the 
day will come when men will take time to think — 
think themselves out of the slavery of the slum into 
the citizenship that shall justify our faith in the re- 
public; that shall give them a grasp of the events 
with which our time is big, the great economic ad- 
justment that is surely coming. We can make out 
its advance guard in the trust movement, even if we 
cannot make out what it means. So that the day 
may come speedily I would have every effort bent 
upon fighting this slum that obstructs men's 
reasoning. 

I would make for the citizen a decent home be- 
cause without it he cannot himself be decent and 
self-respecting. A man cannot live like a pig and 
vote like a man, and if he cannot do that he is a dis- 
turbing factor in the republic I put my trust in, and 
no help to it. I insist on decent schools for him, 
and enough of them, because there he learns, or 



Jacob A. Riis 43 l 

ought to learn, to think and to act when actions are 
wanted. I want his childhood to be unchallenged 
at its play, for so men are made who make their day 
and their time. And I want him to have his share 
of fun, too, decent, rational fun, no less than his 
country brother, for so men are made who balance 
well. I have lived to see the day dawn that allowed 
the boy his fun, though he has n't got it yet. 

I expect to see the man come into his rights, too, 
before I die. Then, will there be fewer misfits than 
now? I hope so. If not, men will be more fit to 
take a hand in the general readjustment that will 
then be due. 



APPENDIX 

Letter to the " Evening Post" 1 
by charles francis adams 

AS is always the case when some pitched battle 
between consolidated capital and organized 
labor is plainly impending, much is now being writ- 
ten and said on the subject of arbitration — or "com- 
pulsory arbitration," whatever that may be — as a 
means of putting a stop to these conflicts, or at least 
of mitigating the injury and inconvenience they 
occasion. 

As between the employer and the employed it 
is, of course, a matter of secondary consideration. 
Were no one else concerned, they might safely be 
left to face, as best they might, the results of a trial 
of endurance. Unfortunately, in these days of well- 
nigh unlimited consolidation on the one side and 
almost complete organization on the other, the gen- 

1 Editor's Note. — This letter was reprinted in the Journal. It 
is referred to in Bishop Potter's letter, in the Introduction, and in 
some of the articles printed in this volume, and is accordingly re- 
produced here in order to render those references intelligible. The 
letter was written in August, iqoi, in the height of the great steel 
strike. 

28 433 



434 Appendix 

eral public — the community at large — necessarily 
sustains prejudice. It is, also, defenceless, without 
apparent power to intervene for its own protection. 
As to what is known as " compulsory arbitration," 
no practical method of causing the award of any tri- 
bunal to be respected and obeyed has yet been de- 
vised, and it is difficult to see how one can be 
devised. It is obviously impossible by any provision 
of law or decree of equity to compel a man to carry 
on a business which he is not willing to carry on ; 
and, on the other hand, it is equally impossible to 
force any employee to labor if he prefers to be idle. 
Even "government by injunction " will not go that 
length. 

My object is to call attention at this juncture to 
the nearest approach to a practical solution of this 
problem which, so far as my observation goes, has 
yet been devised and put in use. 

In the State of Massachusetts there is, and for 
thirty years has been, a Board of Railroad Commis- 
sioners. In the history of that board there is one 
important but now forgotten experience from which 
a highly suggestive lesson can be drawn. It occurred 
nearly twenty-five years ago, and, now that the 
United States Steel Trust and the Amalgamated 
Association are at issue, it might be well worth 
while to revive a recollection of that experience. 

The Massachusetts Railroad Commission was or- 
ganized in 1869 on the theory that, in adjusting 
matters of difference between the community and 
its railroad corporations, arbitrary power was, in the 
long run, less effective in producing results than 



Charles Francis Adams 435 

investigation and subsequent well-considered rec- 
ommendations based thereon. In the event of dif- 
ferences between corporations and their employees, 
even when resulting in strikes and "tie-ups," the 
commissioners had no special powers. It was merely 
their duty in a general way to take official cogniz. 
ance of the fact that the community was sustaining 
an injury or an inconvenience, and to investigate 
the cause thereof. Having so investigated, the 
board was empowered to locate the responsibility 
for such injury or inconvenience and make its rec- 
ommendations accordingly. But those recommen- 
dations had a moral force merely. They could be 
addressed to the parties concerned and to public 
opinion only. Their effect, greater or less, was 
measured by the justice and good sense impressed 
upon them. 

At 4 o'clock P. M. of February 12, 1877, all the 
locomotive engineers and firemen in the employ of 
the Boston & Maine Railroad Company stopped 
work in a body, abandoning their trains. The strike 
was not altogether unexpected, but, of necessity, the 
operation of the road was seriously interfered with. 

The commissioners did not at first intervene, 
neither party calling upon them. Both were, indeed, 
unwilling so to do, being apprehensive, apparent- 
ly, of some action adverse to their interests. When 
several days of interrupted traffic had elapsed, the 
board concluded that it was time to recognize the 
fact that the public was suffering inconvenience ; for 
the Boston & Maine Railroad then was, as it now is, 
one of the principal arteries of eastern New England. 



43 6 Appendix 

Both the directors of the company and the employ- 
ees of the Brotherhood of Locomotive Engineers 
were accordingly notified that the board proposed to 
take a hand in the matter, which it at once pro- 
ceeded to do, notifying an investigation. 

Both parties appeared — without confessing itself 
in the wrong neither could well help so doing — and 
professed willingness to submit their cases. No 
suggestion of a readiness to abide by a decision 
thereon was asked for or given. The board then 
proceeded to hear witnesses and to ascertain the 
facts. The inquiry was continued through three 
days, and on February 21st the report of the board 
was made public, appearing in full in all the papers. 
In it the board, after carefully and judiciously stat- 
ing the facts of the case, placed the responsibility 
for the trouble where the weight of evidence showed 
it belonged, and made such recommendations as in 
its judgment the occasion called for. The effect was 
immediate. An authentic record was before the 
community, and public opinion, crystallizing at 
once, made itself felt. 

Into the history and merits of that particular 
struggle it is unnecessary to enter. The present ob- 
ject is merely to call attention to what was then 
done, and done successfully, as constituting the 
nearest practical approach possible to what is called 
"compulsory " arbitration. A public board is pro- 
vided ; that board takes cognizance of what is no- 
torious; and when either the peace or business of 
the community sustains prejudice, or is gravely 
jeopardized, it becomes its duty to intervene offi- 



Charles Francis Adams 437 

daily. It then spreads the facts before the com- 
munity and makes its recommendations. There it 
stops; for it can compel obedience'on neither side. 
Setting forth the facts, its appeal is to an enlightened 
public opinion. So stimulated, public opinion rarely 
fails to make itself felt. It did so in the case re- 
ferred to. The atmosphere cleared at once, and no 
further action was found necessary. 

Were such machinery as this in existence, either 
national, or provided by the State of Pennsylvania 
— were the executive empowered pro hac vice to ap- 
point such a board — it would seem more than prob- 
able that a practical solution of the difficulty now 
impending could easily be reached. The commu- 
nity has already sustained grave prejudice. By a 
continuance of the existing conditions, not only 
must private interests be sacrificed, but the public 
peace will be endangered. It is not probable that 
either party would call upon such a board to in- 
tervene. Both would look at it askance. 

It would rest in its discretion, or that of the ex- 
ecutive, to decide whether the case was one which 
justified a public initiative. Should it be decided 
that the circumstances did call for it, the board 
would give notice to all concerned that, at the 
proper time and place, it proposed to enter upon an 
investigation. If both, or either, of the parties saw 
fit then to appear and submit the facts, those facts 
would become public property. Did one party ap- 
pear, the other would absent itself at its peril. 
Should neither party appear, producing authentic 
documents and putting in a case, the board would 



43 8 Appendix 

proceed to enlighten itself though all other accessible 
means. If unable to summon witnesses or enforce 
the production of documents, it would still have 
open many secondary channels of information. To 
all such it would have recourse. Having done so, 
it would make its report, putting the responsibility 
where the facts accessible showed it belonged, and 
recommending such practical solution of the trouble 
as might commend itself to the judgment of an un- 
prejudiced tribunal. 

The report so made would carry with the public 
and the parties concerned exactly that degree of 
weight its judicial character and reasoning might im- 
part to it. It could not be enforced by any govern- 
mental process. There is no sheriff behind it. But, 
if well reasoned and fair, it would represent the 
moral weight of an aroused and advised public 
opinion. This is, for every practical end, "com- 
pulsory " arbitration. 

Did some such machinery exist, and could such 
an investigation be made, there is reason to believe 
that a timely report now submitted would, in the 
present case, afford to one or both parties concerned 
an opportunity to withdraw creditably from their 
position, both false and perilous. Were the facts 
undisputed or clearly proven and the recommenda- 
tions made thereon judicious and reasonable, it 
would at least remove from the path the impediment 
of false pride — that fatal stumbling-block in the case 
of nine strikes out of ten. An opportunity grace- 
fully to recede would be offered. This done, should 
either party persist, the responsibility for obstinate 



Charles Francis Adams 439 

persistence would be placed. Experience shows 
that public opinion could then be relied on to en- 
force process. It was so in Massachusetts in the 
case of the strike of 1877. The result on that oc- 
casion was all that could be desired. There seems 
no sufficient reason to doubt that, if it were possible 
to have recourse to the same procedure now, a like 
practical result would ensue. 

Great public inconvenience and private loss might 
thus be averted. But, in case they were not averted, 
and the struggle went on, no additional harm would 
have been done. Merely investigation and public 
opinion would have been brought into play, in this 
case fruitlessly. That, surely, prejudices nothing 
and no one. 



Recognition of the Trade-Unions 1 
by john mitchell 

AS a consequence of the recent and present indus- 
trial disturbances, the question of the recog- 
nition of the trade-unions by the employers of labor 
is being much discussed ; and, judging by the varied 
sentiments expressed, it is evident that there is a 
great diversity of opinion upon this important sub- 
ject. It is also apparent that a vast number of other- 
wise well-informed persons do not understand the 
purpose which prompts the officers and members of 
the trade-unions to insist so strenuously upon their 
organizations receiving official recognition. And if 
one were to accept without investigation the state- 
ments of many of those opposed to the recognition 
of the union, he would be led to believe that there 
were no vital principles involved in the issue, and 
that the unions were not actuated by high ideals or 
lofty motives in making this demand; in fact, it is 
frequently asserted through the columns of the pub- 
lic press and by men prominent in various walks of 
life that the demand for the recognition of the union 
is the result of a desire on the part of what they term 

1 Editor's Note. — From hidependent of August 15, 1901, by 
permission. 

440 



John Mitchell 44* 

demagogic and irresponsible labor leaders to impress 
their own personalities upon the public mind and 
attract attention to themselves regardless of the 
interests of the great mass of the people who are 
compelled to work from day to day for their liveli- 
hood. 

There is another class, principally large employers 
of labor, who assume that a contract made with a 
labor organization is impractical and valueless be- 
cause they say that labor organizations are not incor- 
porated ; that they have no legal existence, and 
consequently a contract fixing the wages and regu- 
lating the conditions of employment of their em- 
ployees, made with a labor organization, would not 
be observed ; or, in other words, the workers would 
be under no obligation whatever to carry out either 
the letter or the spirit of the contract, because the 
labor organization with which the contract was made 
could neither sue nor be sued. 

There are also employers who justify their refusal 
to recognize the union upon the specious ground 
that they are opposed to the interference of persons 
who are not directly in their employment — that is 
to say, they object to the intervention of the 
officials of the labor organizations, who, as a rule, 
are not employed in the mills, the mines, or the 
factories; but, on the contrary, devote their entire 
time and attention to their duties as officials of the 
organizations they represent. My observation has 
been that where an employer has refused to recog- 
nize the union for any of the reasons enumerated, 
he is invariably opposed to the union itself. It 



44 2 Appendix 

must be apparent to every fair-minded man that a 
labor organization, like any and every other institu- 
tion, must have trained men, specialists, indeed, to 
direct its affairs; and in these days of industrial con- 
centration the organizations require and employ as 
officers the most skilled and the best-informed per- 
sons they can find in their respective trades; and 
particularly is it essential that the unions be repre- 
sented by men of wide experience and honest mo- 
tives; men who are fearless in the prosecution of 
their duties; men who will insist upon labor receiv- 
ing that portion of the profits of industry which 
properly belongs to it ; but who, at the same time, 
will recognize the right of the employers to receive 
that portion of the profits to which their invest- 
ments entitle them. 

That none of the reasons assigned by those who 
oppose recognition of the union are valid can, I 
think, be demonstrated beyond the possibility of 
reasonable doubt. While it is true that a large ma- 
jority of the trade-unions are not incorporated ; that 
they have no legal existence; that they can neither 
sue nor be sued ; I do contend that the contracts 
made between them and the employers of labor 
have been and would be observed as sacredly and 
their provisions carried out as religiously as though 
it were a penal offence to violate them ; and I 
am sure that experience has demonstrated that 
in those trades and industries where the employees 
are best organized and where the trade-union is 
recognized and contracted with, strikes and labor 
disturbances have been least numerous. To illus- 



John Mitchell 443 

trate this point I would call attention to the sit- 
uation in the bituminous and anthracite coal fields 
of the United States, for the purpose of contrasting 
conditions in fields where the union is recognized 
and where it is ignored. There are four hundred 
thousand men and boys employed in the coal-min- 
ing industry of this country; of the two hundred 
and fifty thousand working in the bituminous fields 
nearly all are members of the United Mine Workers 
of America, a national trade organization. The 
union is recognized by the mine owners, and once 
each year representatives of the miners' union and 
representatives of the mine owners meet in joint in- 
terstate convention, and enter into an agreement 
stipulating the wages and fixing the conditions of 
employment which shall obtain during the life of 
the contract, or for a period of one year. The con- 
tract is signed by the officers of the Miners' Na- 
tional Union; and while its provisions cannot be 
enforced by any court, while there is nothing but 
the honor and good faith of the parties to it to make 
it operative and binding, yet in the three and one 
half years in which these contracts have been in ex- 
istence there is not a single instance in which a vio- 
lation of contract can be cited, either on the part of 
the mine owners or of the mine workers. On the 
other hand, take the anthracite coal fields, in which 
one hundred and fifty thousand men and boys are 
employed, who are also members of the United Mine 
Workers of America. In this important branch of 
the coal industry specific contracts are not entered 
into between the mine workers and the mine owners ; 



444 Appendix 

and the organization of which all these men and boys 
are members is not recognized by the employers. 
The conditions there are the exact reverse of those 
prevailing in the bituminous coal fields; strikes are 
of frequent occurrence, and neither the miners, the 
mine owners, nor the public have any guaranty that 
the coal supply of all the Eastern States may not be 
cut off at almost any moment; and in this district 
the miners constantly complain that they are being 
treated unjustly by the mine owners ; that wages are 
reduced without warning and without giving the 
workers an opportunity to discuss the equity of the 
action or the necessity for it; and the mine owners 
as often complain that their mines are closed by 
strikes inaugurated by the mine workers without 
cause or justification. Whereas if the mine owners 
and the representatives of the Miners' National 
Union should meet in conference and fix specifically 
the amount of wages to be paid and the conditions 
of employment which should obtain — as is done in 
the bituminous coal fields — there would be a posi- 
tive assurance that work would continue uninter- 
ruptedly during the life of the contract. And what 
is true of the mining industry applies with equal 
force to every other industry of the United States. 
It goes without saying that every strike and every 
lockout affects seriously others than those directly 
engaged in the strike or lockout. Great public in- 
terests are involved, and it is certainly a matter of 
no small concern to the public that some method be 
adopted through which strikes and lockouts may be 
entirely avoided, or at least reduced to the minimum. 



John Mitchell 445 

Experience has demonstrated that the most practi- 
cal plan which the ingenuity of man has been able, 
up to this time, to devise is for employers to recog- 
nize the union; meet its representatives in confer- 
ence; enter into trade agreements which define in 
detail the conditions of employment which shall ob- 
tain during the life of such agreements. The con- 
stitution and laws of nearly every labor organization 
make it an offence punishable by expulsion for any 
member to violate a trade agreement or even by sub- 
terfuge to evade any of its provisions. The officers 
of the trade organizations of the present day recog- 
nize the great responsibility resting upon them, and 
they are few indeed who dare, even if they were so 
inclined, ruthlessly to disregard the sacred obliga- 
tions of a contract. I know of many instances where 
contracts which were in conflict with the constitu- 
tion and laws of trade-unions have been entered into 
with employers, and yet the officers and members of 
the trade organizations have insisted that the con- 
tracts superseded the constitution and laws and took 
precedence of them ; in fact, I recall several specific 
cases where the members of a local union connected 
with a national organization went on strike for the 
purpose of enforcing a higher rate of wages than was 
provided for in the contract made between the na- 
tional organization and an employers' association, in 
which the officers of the national union promptly 
filled the places of the strikers with other men in 
order that the union could not be charged with or 
convicted of breach of faith. 

As the unions have grown in numerical strength, 



446 Appendix 

as their power and responsibility have increased, 
they have become correspondingly conservative in 
their administration. The labor unions are here; 
they are here to stay; they are a power which must 
be reckoned with ; they were not formed from senti- 
mental ideas ; they do not advocate Utopian theories 
or impractical policies ; they have not grown to their 
present vast magnitude without good cause. The 
time has passed when wages and conditions of em- 
ployment can be fixed satisfactorily at the door of 
the factory or at the mouth of the mine ; the work- 
ers insist — and justly, too — that their wages shall be 
agreed to in conference halls where reason and logic, 
conservatism and equity shall be the controlling in- 
fluences; they insist upon being represented in these 
conferences by men qualified hy education and ex- 
perience to defend their interests in as able a man- 
ner as the interests of capital are defended and 
protected by its representatives. 

The assumption of some employers of labor that 
because they own a mine, a mill, a railroad, or a fac- 
tory they have the absolute right to do with their 
property as they choose, regardless of the effect of 
their action upon the welfare of the men and women 
they employ, or upon the public interests, is so su- 
perficial as scarcely to deserve notice. Any quasi- 
public institution, be it mine, mill, railroad, or 
factory, which is chartered by the State and conse- 
quently responsible to the people, is certainly not 
invested with absolute authority to injure the wel- 
fare of society by throwing its employees into 
idleness simply because they demand the right to 



John Mitchell 447 

bargain collectively as to the wages and conditions 
which shall govern their employment; and it is a 
certainty that there will be no industrial peace until 
this right is conceded by the employers of labor. I 
have never known an instance where the representa- 
tives of capital and labor have failed to agree when 
the two sat down together, put their feet under the 
table, and told one another the absolute truth. I am 
confident that every great strike which has taken 
place in our country could have been avoided if each 
side had been reasonable and honest with the other. 
It is not only positively absurd but also unwise for 
employers of labor to stand upon their own precon- 
ceived ideas of their individual rights and declare to 
the world that they would rather close their mills, 
their factories, or their mines than recognize the 
trade-unions or discuss the wages they shall pay the 
labor they employ. There would be as much logic 
and as much reason in the position were the em- 
ployees to refuse to treat with the managers, the 
superintendents, or the counsel employed by the 
stockholders of any corporation. If the employers 
are honest in their public declarations that they de- 
sire to treat labor fairly they should have no fear of 
recognizing the trade-union. 



From the Address of Samuel Gompers be- 
fore the Arbitration Conference, held 
at Chicago, III., December 17, 1900, 
under the Auspices of the National 
Civic Federation 1 

IN common with the general trend of organized 
labor to prevent strikes and lockouts whenever 
and wherever possible, a sentiment for arbitration 
has been awakened among the people of our coun- 
try. There are some, however, who, playing upon 
the credulity of the uninformed, seek to divert the 
principle of arbitration into a coercive policy of so- 
called compulsory arbitration — in other words, the 
creation by States, or by the nation, of boards or 
courts, with power to hear and determine each case 
in dispute between the workers and their employers, 
to make awards, and, if necessary, to invoke the 
power of the Government to enforce the awards. 
Observers have for years noted that those inclined 
to this policy have devised many schemes to deny 
the workers the right to quit their employments, 
and the scheme of so-called compulsory arbitration 
is the latest design of the well intentioned but un- 
informed, as well as the faddists and schemers. 

1 Published by the American Federation of Labor. Reprinted by 
permission . 

448 



Samuel Gompers 449 

Our movement seeks, and has to a certain extent 
secured, a diminution in the number of strikes, par- 
ticularly among the best organized. In fact, the 
number and extent of strikes can be accurately 
gauged by the power, extent, and financial resources 
of an organization in any trade or calling. The 
number of strikes rises with lack of or weakness in 
organization, and diminishes with the extent and 
power of the trade-union movement. Through 
more compact and better-equipped trade-unions 
have come joint agreements and conciliations be- 
tween the workmen and associated employers, and 
only when conciliation has failed has it been neces- 
sary to resort to arbitration, and then the only 
successful arbitration was arbitration voluntarily en- 
tered into, resulting in awards voluntarily obeyed. 

Organized labor cannot by attempted secrecy 
evade the provisions of an award reached by com- 
pulsory arbitration and determine upon a strike. By 
reason of our large numbers every act would be an 
open and public act known to all ; while, on the 
other hand, an employer, or an association of em- 
ployers, could easily evade the provisions of such a 
law or award by the modern process of enforcing a 
lockout; that is, to undertake a "reorganization" 
of their employees. 

It is submitted that the very terms "arbitration " 
and "compulsory "stand in direct opposition to each 
other. Arbitration implies the voluntary action of 
two parties of diverse interests submitting to disin- 
terested parties the question in dispute, or likely to 
come in dispute. 



45° Appendix 

Compulsion, by any process, and particularly by 
the powers of government, is repugnant to the prin- 
ciple as well as to the policy of arbitration. / If or- 
ganized labor should fail to appreciate the danger 
involved in the proposed schemes of so-called com- 
pulsory arbitration, and consent to the enactment of 
a law providing for its enforcement, there would be 
introduced the denial of the right of the workers to 
strike in defence of their interests and the enforce- 
ment by the Government of specific and personal 
service and labor. In other words, under a law based 
upon compulsory arbitration, if an award were made 
against labor, no matter how unfair or how unjust, 
and brought about by any means, no matter how 
questionable, we would be compelled to work or to 
suffer the stated penalty, which might be either 
mulcting in damages or going to jail, not one scintilla 
of distinction, not one jot removed from slavery. 

It is strange how much men desire to compel 
other men to do by law. What we aim to achieve 
is freedom through organization. 

Arbitration is only possible when voluntary. It 
never can be successfully carried out unless the par- 
ties to a dispute or controversy are equals, or nearly 
equals, in power to protect or defend themselves, or 
to inflict injury upon the other party. The more 
thoroughly the workers are organized in their local 
and national unions, and federated by common 
bond, policy, and polity, the better shall we be able 
to avert strikes and lockouts, to secure conciliation, 
and, if necessary, arbitration, but it must be volun- 
tary arbitration or there shall be no arbitration at all 



Samuel Gompers 45 1 

— voluntary in obedience to the award as well as vol- 
untarily entered into. 

It is our aim to avoid strikes, but I trust that the 
day will never come when the workers of our coun- 
try will have so far lost their manhood and indepen- 
dence as to surrender their right to strike or refuse 
to strike. We seek to prevent strikes, but we 
realize that the best means by which they can be 
averted is to be the better prepared for them. We 
endeavor to prevent strikes, but there are some con- 
ditions far worse than strikes, and among them is 
a demoralized, degraded, and debased manhood. 
Lest our attitude be misconstrued, we emphatically, 
and without ambiguity, declare our position. The 
right to quit work at any time, and for any reason 
sufficient to the workman himself, is the concrete ex- 
pression of individual liberty. Liberty has been de- 
fined as the right to freely move from place to place. 
Hence any curtailment of this right, by and through 
law, or by and through contract enforced by law, is, 
in fact, a negation of liberty and a return to serfdom. 

The industrial conciliation and arbitration law of 
New Zealand, the law creating and governing the 
Indiana Labor Commission and Arbitration Board, 
copied from the laws of 1897 and issued by the In- 
diana Commissioners, and the arbitration law of 
Illinois, as well as an act concerning carriers en- 
gaged in interstate commerce and other employees, 
approved June 1, 1898, along with other information 
from this and European countries, show that the 
kernel of all this species of legislation is a desire to 
prevent strikes by punishing the strikers. 



45 2 Appendix 

Dealing with this matter more specifically, we find 
that the New Zealand law provides for a Board of 
Conciliation, with power to use their best efforts in 
bringing the contending parties together and in 
causing them to make some agreement. This fail- 
ing, it goes, upon the demand of one of the contend- 
ing parties, before the Industrial Court, which has 
the power, as any other court, to hear and deter- 
mine, and the award or sentence is enforced by the 
State in the usual way, by fine or imprisonment, 
or both, the only distinction being that the trial by 
jury is dispensed with and an appeal denied. The 
only relieving feature about this law is that indi- 
viduals cannot claim its protection. Men must vol- 
untarily enter into a labor union or an association in 
order to come under its provisions. The industrial 
courts of France are, as I understand it, organized 
much in the same way. The bill to prevent strikes 
which was introduced in the German Reichstag at 
the instance of the Government had the same un- 
derlying motive, and practically the same way, of 
attaining this purpose. In the law adopted by the 
Hungarian Diet, we again meet the same purpose 
to prevent strikes by punishing the strikers. The 
question of extending the master and servant laws 
of Sweden to the industrial workers of that country 
was under discussion in the Swedish Ricksdag, and 
was for some time fiercely combated by the lovers 
of liberty of that country, but it was finally adopted, 
and the other day a strike on the street cars in 
Stockholm was suppressed by sending several of the 
strikers to prison for long terms. 



Samuel Gompers 453 

Coming now to our own country, we find that a 
bill was introduced in Congress which would admit 
of every train being made a mail train, and which, 
under the postal laws, would have subjected the 
strikers in railroad transportation to imprisonment 
for delaying the mails. Through the efforts of the 
railroad brotherhoods and the American Federation 
of Labor the bill failed. Then followed the intro- 
duction of the Olney Arbitration Bill, which pro- 
vided for arbitration, voluntary in submission, or in 
its initiatory stages, but with compulsory obedience 
to the award; that is, the award was to be enforced 
by a direct penalty for the individual violating the 
same. The Indiana law has the following provisions : 

" An agreement to enter into arbitration under this act, 
shall be in writing, and shall state the issue to be sub- 
mitted and decided, and shall have the effect of an agree- 
ment by the parties to abide by and perform the award." 

And Section 10, page 133, reads as follows: 

" The clerk of the Circuit Court shall record the papers 
delivered to him as directed in the last preceding section, 
in the order book of the Circuit Court. Any person who 
was a party to the arbitration proceedings may present 
to the Circuit Court of the county in which the hearing 
was had, or the judge thereof, in vacation, a verified pe- 
tition referring to the proceedings and the record of them 
in the order book and showing that said award has not 
been complied with, stating by whom and in what re- 
spect it has been disobeyed. A nd, thereupon, the court, 
or judge thereof, in vacation, shall grant a rule against 



454 Appendix 

the party or parties so charged, to show cause within five 
days why said award has not been obeyed, which shall 
be served by the sheriff as other process. Upon return 
made to the rule, the judge, or court, if in session, shall 
hear and determine the questions presented, and make 
such order or orders direct to the parties before him in 
personam, as shall give just effect to the award. Diso- 
bedience by any party to such proceedings of any order 
so made, shall be deemed a contempt of court and may be 
punished accordingly. But such punishment shall not ex- 
tend to imprisonment except in case of wilful and con- 
tumacious disobedience. In all proceedings under this 
section the award shall be regarded as presumptively 
binding upon the employer and all employees who were 
parties to the controversy submitted to arbitration, which 
presumption shall be overcome only by proof of dissent 
from the submission delivered to the arbitrators, or one 
of them, in writing before the commencement of the 
hearing." 

It will be observed that this may be called volun- 
tary arbitration, because it is voluntarily entered 
into. The parties agree from the very beginning 
that if they, for some reason sufficient to them- 
selves, should decline to abide by and perform the 
award, they are willing that the judge alone, with- 
out any jury and without any limit as to time, may 
send them to prison until they shall consent to per- 
form the labor which the award enjoins upon them. 
The thought underlying this law is that the indi- 
vidual man may alienate his right to liberty, and it 
is, therefore, destructive of the fundamental princi- 
ple of the Republic of the United States. It is 



Samuel Gompers 455 

equally dangerous with the New Zealand law, the 
Hungarian statute, or the proposed law of Germany, 
because it aims at tying the worker to the mine, the 
factory, or the means of transportation upon which 
he works, in the same way in which the agricultural 
worker, during the feudal era, was tied to the soil. 
I am not singling out the Indiana law as different 
from all the rest or worse than the rest. I quote it 
simply because it is before us. Paragraph five of the 
Illinois law reads as follows: 

11 In the event of a failure to abide by the decision of 
said board in any case in which both employer and em- 
ployees shall have joined in the application, any person 
or persons aggrieved thereby may file with the clerk of 
the Circuit Court or the County Court of the county in 
which the offending party resides, or in the case of an em- 
ployer in the county in which the place of employment 
is located, a duly authenticated copy of such decision, 
accompanied by a verified petition reciting the fact that 
such decision has not been complied with, and stating 
by whom and in what respect it has been disregarded. 
Thereupon the Circuit Court or the County Court, as the 
case may be, or the judge thereof, if in vacation, shall 
grant a rule against the party or parties so charged, to 
show cause within ten days why such decision has not 
been complied with, which shall be served by the sheriff 
as other process. Upon return made to the rule, the 
court or the judge thereof, if in vacation, shall hear and 
determine the questions presented, and to secure a com- 
pliance with such decision, may punish the offending 
party or parties for contempt, but such punishment shall 
in no case extend to imprisonment." 



456 Appendix 

The difference between this section and the one 
quoted from the law of Indiana, aside from the final 
proviso, the value of which is doubtful, is in phrase- 
ology only; any further comment is, therefore, un- 
necessary. 

The Manufacturers' Association of the South, 
meeting during the last year, decided to submit to 
the legislature of each of the Southern States a law 
providing for term contracts, the violation of which 
would be punished as a felony, and they did this 
with the specific purpose of preventing strikes and 
of inviting Northern capital. When their attention 
was called to the fact that they were as yet not 
" bothered" by labor organizations, they answered: 
"That 's true, and that 's just the reason why we 
decided to take steps to prevent the formation of any 
and to stop strikes in the most effective manner." 

All these schemes are reactionary in their charac- 
ter. They mean simply that the employers of to- 
day find themselves in a somewhat similar position 
to the employers of England after the "Black 
Death." The King issued a proclamation at that 
time that any one who would refuse to continue to 
work for the wages usually paid in a specified year 
of the King's reign would by the State be compelled 
to labor at such wages, regardless of any wishes that 
he or she might have. The English Parliament later 
enacted this into a statute known as the "Statute of 
Laborers," and re-enacted it periodically with ever- 
increasing penalties, until Henry VIII., finding 
himself in need of funds, confiscated the Guild 
funds, and by impoverishing the organizations of 



V 



Samuel Gompers 457 

labor at that time succeeded in enforcing the Statute 
of Laborers from that time on. 

That law was every bit as fair upon its face as the 
laws of New Zealand, Indiana, Illinois, or any other 
of those laws with which I have any acquaintance, 
because it provided that the judges sitting in quarter 
sessions should hear both sides and then determine 
upon a "fair wage " for the year. Readers of Six 
Centuries of Work and Wages, by Thorold Rogers, 
professor at the University of Oxford, will know the 
results to the English working people. Their daily 
hours of labor were increased, their wages reduced, 
until it was necessary to enact the "poor Laws," 
and to quarter the worker upon the occupier, because 
he was continually being robbed by the employer. It 
has been stated by others that this law reduced the 
stature of the British workers by about two inches, 
and that the poverty — the real, dire poverty — to be 
found in the back alleys of English cities, even to 
this day, is largely caused by that species of 
legislation. 

The thirteenth amendment to the Constitution of 
the United States, forbidding slavery or involuntary 
servitude, may perhaps be quoted to show that in 
our country no one can be compelled to work against 
his or her will, and that, therefore, there is no 
serious danger to individual liberty in the so-called 
"voluntary arbitration laws." 



INDEX 



Adams, Chas. Francis, xii.; arbi- 
trator, xxviii.; on corporations, 
386 ; letter of, 433 

Arbitration, xxiii., 44, 77 ; court 
of, 106 ; casual expedient, 
124 ; value of, 138 ; plea for, 
142, 144; definition of, 146; 
in New York, 165 ; economy, 
171 ; success of, 186 ; favored 
by railway conductors, 243 ; 
by coal miners, 246 ; board of, 
260, 261 ; trade board, 264 ; 
principles of, 268 ; national- 
ization of, 272 ; in Massachu- 
setts, 276 ; plans of, 281 ; 
principles of, 290 ; success and 
failure, 291 ; obstacles, 299 ; 
law, 303, 345 ; enforcement of, 
436 ; conditions of, 450 ; see 
also Compulsory arbitration 

Atkinson, Edward, xxxv. 

B 

Bliss, W. D. P., paper by, 378 

Blondel, Unction, 163 

Board of conciliation, xxxv., 

223, 262, 285, 452 
Boot and Shoe Workers' Union, 

275 
Bourn ville Village Trust, 314 
Building trades, experience in, 

259 ; plan for, 263 



Cadbury, 314 
CAIL, xxv., xxvi. 



Chase, John C, paper by, 374 

Child labor, 67, 182, 184, 403, 
413 

Church, arbitrators, xxv. ; reso- 
lutions of convention, xxvi. 

Clark, Edward E., arbitrator, 
xxx.; paper by, 238 

Clark, John B., paper by, 27 

Coal miners, 245, 443 

Collectivism, xxxii., 421 

Compulsory arbitration, xxiv., 
72, 106, 154; need of national 
court, 179 ; logical necessity, 
185 ; court of, 192, 223 ; in- 
dustrial courts, 200, 452^".; 
law of New Zealand, 221 ; re- 
sults of, 227 ; objections to, 
281, 295, 434, 448 

Conciliation, courts of, 165 ; 
boards of, 223, 262, 285, 452 

Co-operation, 333, 347, 354, 366; 
in distribution, 371, 375 

Corporation legislation, 39^"., 

45, 54, 99 

Courts of arbitration and con- 
ciliation, see Compulsory arbi- 
tration, Conciliation 

Crosby, Ernest Howard, paper 
by, 400 

D 

Davies, Henry, paper by, 3 
Dill, James B., paper by, 32 
Douglas, W. L., paper by, 275 



Easley, Ralph M., xix., xxviii., 
xxix. 



459 



460 



Index 



Education, 4, 278, 380 ; of the 
worker, 419 

Eidlitz, Otto M., paper by, 259 

Employees' associations, see 
Labor unions 

Employers' associations, 228, 
257, 260, 264, 270, 273 ; na- 
tional, 282 ; defence fund, 
283 ; 284, 2S7, 290, 293, 344, 

443, 445, 449, 456 
Employment bureau, 56, 422, 
427 



Farmers, opinions of, 252 ; 

schools for, 423 ; lonesomeness 

of life, 429 
Fieldhouse, Walter, paper by, 

179 
Founders, experience of, 258 
Fox, Martin, paper by, 287 



Gibbons, Cardinal, paper by, 

xviii., 140 
Giffin, Robert, xxxv. 
Gilman, Nicholas P., paper by, 

330 
Gilraeth, 313 

Going, Charles B., paper by, 168 
Golden Rule, 274, 369 
Gompers, Samuel, arbitrator, 

xxx.; paper by, 62 ; address 

of, 448 
Government by injunction, see 

Injunction 



H 



Hadley, Pres., paper of, xviii. 
Hall, Bolton, paper by, 388 
Hanna, Marcus A., xxviii. f. 
Hardie, J. Kier, paper by, 363 
Hearst, W. R., letter to, xi.; 

symposium, xiv. 
Hewitt, Abram S., views of, 

xxxiii. 



Hirsch Fund, 422, 428 

Hogan, Thomas J., paper by, 

280 
Holt, Geo. C, paper by, 95 
Hoyt, H. W., paper by, 268 



Illinois, State board, 247, 451 ; 

law of, 455 
Incorporation of Unions, 107, 
114, 124, 195, 278, 341, 441, 
442 ; see also Labor unions 
Indiana, laws of, 451, 453 
Individualism, xxxii., 4, 376, 

421 
Industrial, arbitration, 59 ; 
courts, 200 ; betterment, 321, 
337 ; autocracy, 355 ; ol- 
igarchy, 413 
Injunction, xxiii., 102, 108, 114, 

193, 195, 214, 216, 304, 434 
International longshoremen, 75 
Ireland, land laws, 196, 206 
Iron Moulders' Association, 273, 
284 ; experience of, 287 



J 



Jones, Samuel M., paper by, 
369 



K 



Keefe, Daniel J., arbitrator, 

xxx. ; paper by, 75 
Kilbourne, James, 312 



Labor bureau, see Employment 
bureau 

Labor legislation, 282, 451^". 

Labor unions, xxii., xxxviii., 20; 
benefits of, 55 ; benefits to 
employers, 57 ; distrust of 
leaders, 59; strikes, 52, 118,450; 
woman and child labor, 66 ; 
what they stand for, 68 ; re- 



Index 



461 



Labor unions — Continued. 

sponsibility of, 75, 441 /. ; liv- 
ing wage, 80 ; not controlled 
by law, 96 ; strike violence, 
101; controlled bylaw, 105; in- 
corporation, 107, 114, 124, 195, 
27S, 442 ; methods, 123 ; value 
°f, x 37 J grievance committee, 
147 ; compulsory arbitration, 
158 ; object, 179 ; unskilled 
labor, 183 ; in Great Britain, 
1S4 ; basis of arbitration, 223 ; 
use of arbitration, 227 ; powers 
of representatives, 262 ; agree- 
ment with employers, 264 ; 
foundation of, 273 ; growth, 
287 ; opposition, to profit shar- 
ing, 340, 3G6, to incorpora- 
tion, 341, toco-operation, 367; 
financial responsibility, 342, 
344; value and limitations, 382; 
educational influence, 411; re- 
cognition of, 440 ; represent- 
atives of, 441 ; obligation of 
contracts, 445 ; power of, 446 

Leavitt, John Brooks, paper by, 
no 

Leclaire, experience in, 340, 349 

Legislation, corporation, 39 ff., 
45, 54, 99 ; labor, 282, 45 iff. 

Leo XIII. on industrial condi- 
tions, 162 

Lever, W. H. 319 

Livesey, 326 

Lloyd, Henry D., paper by, 185 ; 
history of Standard Oil, 406 ; 
Newest England, 42 r 

Lockouts, 153, 214, 217, 256, 
260, 271, 444, 449 

Longshoremen, 75 

Low, Mayor, arbitrator, xxv., 
xxvii., 167 

Lusk, Hugh H., paper by, 221 

M 

Machinery, effect of, 16 ff., 169, 
401 ; and workmen, 402 

Mallock, Labor and Popular 
Welfare, xii. 



Massachusetts, Railroad Com- 
missioners, 99, 434 ; concili- 
ation and arbitration, 143 ; 
State Board, 275 
McMackin, John, paper by, 160 
Mediation, board of, 166 
Mill, John Stuart, xxxvi., 381, 

401, 407 
Miners' National Union, 443 
Mitchell, John, arbitrator, xxx.; 

paper by, 245, 440 
Model industries, 125, 312, 314, 

319. 325, 335, 338, 344, 353 
Monopoly, xxii., 29, 30, 32, 42, 

53, 295, 368, 396, 406, 410 
Moral character, 17, 57, 70, 161 



N 



National Civic Federation, arbi- 
tration conference, xix. /. ; 
industrial department, xxviii. 

National Founders' Association, 
270, 292 

Nelson, N. O., paper by, 344 

New Jersey corporation laws, 
40 

New York, corporation laws, 41; 
State Board, 166 

New Zealand, 45, 154/., 205, 
21S; experience of, 221; arbi- 
tration law, 223,451/1, ; results, 
227 ; principles of law, 231, 
281, 297 ; public works, 420 



Peters, Wm. R., paper by, xviii., 

SO 
Pomeroy, Eltweed, paper by, 

353 

Port Sunlight, 319 

Potter, H. C, letter, xi.; arbi- 
trator, xxv., xxvii., xxix., 166 ; 
scheme of discussion, 44 ; pa- 
per by, 133 

Procter & Gamble, 339 

Profit sharing, xxx., xxxvii., 323, 
334, 339, 346, 353, 3 66 > 381 



462 



Index 



Prosperity sharing, 309, 334, 353 

Public franchises, xxxi., 159, 

I0 7> 255, 277; and arbitration, 

2 97, 3°3 ; municipalization, 

367 ; profits from, 407 

Public ownership, 367, 387, 422 



R 



Railway, Order of, Conductors, 
238 ; favor arbitration, 243 

Railway employees and arbitra- 
tion, 299 

Rate of wages, xxxv., 51, 55, 69, 
83/:, 124, 193, 204, 287, 290, 
402, 445 

Reed, Warren A., paper by, 143 

Reno, Conrad, paper by, 200 

Reynolds, Jas. B., paper by, 55 

Right of workman in plant, xvi., 
xviii., 17, in, 124, 446 

Riis, Jacob A., arbitrator, xxvii. ; 
paper by, 425 

Rochdale, 348 

Rogers, Henry H., vaseline pat- 
ents, 423 

Rogers, Thorold, English poor 
law, 162 ; Six Centuries of 
Work and Wages, 457 



S 



Sargent, Frank P., arbitrator, 

xxx. ; paper by, 299 
Shaffer, Theodore J., xi., xxx. 
Single tax, xxxi., 125, 388, 395, 

408, 409 
Socialism, xxxi., 9, 49, 121, 125, 

363, 369, 374, 378, 395, 405 
South Metropolitan Gas Co., 325 
Stahl, John M., paper by, 252 
Standard Oil, 52, 100, 402, 406 
State boards, xxiv., 99, 148 ; 
arbitration by, 149 ; experi- 
ence in New York, 166 ; juris- 
diction, 180; Illinois, 247; 
Massachusetts, 275 ; useless- 
ness, 281, 298 ; railroads, 434; 
province of, 436 ; objections 
to, 451 



State Labor Bureau, 427 
Stead, Wm. T., paper by, 323 
Stock sharing, xxx., xxxvii., 324, 

341, 346 
Stokes, Anson P., paper by, 44 
Stove makers', defence associa- 
tion, 256 ; experience, 280, 
283, 288 
Stove moulders, 256 
Strikes, xxiii., 56, 62, 100, 142, 
I 53> I0 5, ID 7 I engineering 
trades, 174, 185, 193, 214, 256, 
260; sympathetic, 263, 265, 
271, 288; National Cash 
Register, 336 ; steel, 337, 364, 
367, 394, 437 ; how to avoid, 
420, 444, 449 ; locomotive en- 
gineers, 435 ; use of, 451 ; laws 
against, 452, 456 
Strong, Josiah, paper by, 13 



Taff Vale, 342 

Tariff, xvi., xvii., 49, 53, 125, 

181, 183, 396, 406, 408, 410 
Tolman, Wm. H., paper by, 309 
Trade agreements, 149, 345, 443, 

445 

Trade arbitration, 264 

Trade conferences, xxv. , 78, 177, 
241, 246, 256, 260, 272, 285, 
289, 443, 445, 447 

Trade-unions, see Labor unions 

Trusts, xxi., xxiii., 16; market 
rates, 27 ; purpose, 28 ; mo- 
nopoly, 29 ; definition, 32 ; 
dangers, 35 ; politics, 36 ; 
speculation by officers, 36, 
46 ; publicity, 37, 45 ; legis- 
lation, 39, 45, 52 ; not mo- 
nopolies, 42 ; benefits, 50 ; 
not controlled by law, 96 ; 
fraudulent methods, 97 ; need 
of control, 99 ; controlled by 
law, 105 ; methods, 123; arbi- 
tration, 295; industrial better- 
ment, 337 ; possibilities, 338 ; 
condemned, 363; good of, 371; 
step to socialism, 376; increase, 



Index 



463 



Trusts — Continued. 

386 ; opposition to, 387 ; in- 
solence of, 408 ; movement, 
431 

U 

Umpire, 263, 268 
Unemployed, 419, 425 
United Mine Workers, 443 

V 

Vaughan, Cardinal, 1C2 

W 

Wages, standard of, 193 ; living 
wage, 196 ; fair, 201 ; mini- 
mum, 213 ; industrial courts, 



216 ; economizing in, 287 ; 
source of friction, 290 ; divi- 
dend on, 350 ; and organiza- 
tion, 382 ; methods of increas- 
ing, 390 ; and land, 396 ; 
average, 402 ; strikes for, 445 ; 
settlement of, 446 ; fixed by 
law, 456 ; see also Rate of 
wages 

Walking delegates, 58, 261, 412, 
441 

Warner, John De Witt, paper 
by, 119 

Washington, Booker T., 419 

Wheeler, Everett P., paper by, 
419 

White, Henry, arbitrator, xxx.; 
paper by, 80 

Wright, Carroll D., paper by, 
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